Topic: Australian Unit Trusts and US Federal taxes
1) I am a US Citizen, residing in Hong Kong (but of course, considered a US tax
resident so I file a 1040 and am taxed as though I live in the US)
2) I have invested in an Australian Unit Trust which will make investments in Private Equity and Hedge funds. The PE and Hedge Funds use the typical Cayman Island structures
3) 75%+ of the income and gains from the PE and Hedge Funds will be derived from non-Australian (and non-US) investments.
4) the nature of the income to the Unit Trust will be primarily interest income, ST and LT capital gains, possibly dividend income.
1) how will distributions from the Aussie Unit Trust be taxed by the US?
2) would I have more favourable tax treatment if I invested in the PE & Hedge Fund via a Delaware LP, as I do for 99% of my other PE investments?
Summary - how much of a tax disadvantage is investing via the Aussie Trust vs a Delaware LP?