Complete tax services
for alternative investment funds

About our tax services

Formidium offers tailored tax services for a wide range of fund types, including Digital Asset, Hedge, Private Equity, Venture Capital, and SPVs. Headquartered in Downers Grove, IL, we serve a global client base across 10+ countries. Trusted by over 800 funds, we deliver top-tier tax support powered by our proprietary Tax Accounting & Allocation Technology.

Led by licensed CPAs and supported by a team of 50+ professionals, we specialize in automating tax calculations, reporting, and filings — including Schedule K-1s for investors. Our technology streamlines data retrieval, cleansing, and reconciliation to ensure accurate capital gains/loss calculations and precise tax lot accounting. At Formidium, we combine innovation with client-centric service to deliver unmatched results.

  • Review of the private placement memorandum tax section.
  • Preparation of U.S. federal tax returns (Forms 1065, 1120, 1120-S) and state tax returns for all U.S. states, including handling composite tax returns, state filing fees, state tax withholdings, and other related tasks.
  • Preparation of all supporting and additional tax forms that are filed along with federal and state tax returns (Forms 8949, 4797, 8825, 8990, 8082, 8832-B, etc.).
  • Preparation of federal and state Schedule K-1 reporting for investors.
  • Partner tax allocations using appropriate allocation methods.
  • Preparation and compliance for foreign investments (Forms 5471, 8865).
  • Preparation of international reporting tax forms K-2 and K-3.
  • Preparation of other miscellaneous forms, such as Form 1099s, name change forms, and address change forms.
  • Preparation of responses to IRS and state revenue notices.
  • Offering and organizing cost amortization, book-to-tax reconciliations, maintaining tax basis for investors' capital and fund investments, and handling the assignment of interest from one investor to another.
  • Tax lot-level capital gain/loss calculations and wash sales calculations.
  • Carried interest reporting under IRC Section 1061.
  • All relevant items are covered for U.S. funds and entities.
  • Preparation of tax returns for foreign partnerships and blocking corporations, including foreign master-feeder structures.
  • Analysis of the entity's structure to determine applicable U.S. tax filings (e.g., Passive Foreign Investment Company vs. Controlled Foreign Corporation determination).
  • Filing applicable tax forms for non-U.S. funds and entities, including Form 8621 and Form 5472 reporting.
  • Preparation of K-1 equivalent forms for non-U.S. entity/fund investors, including PFIC and CFC reporting.

Tax specific services

We provide specialized tax services tailored to the requirements of crypto funds, including analysis and tax adjustments for:

  • Contribution-in-kind and distribution-in-kind.
  • Wallet-to-wallet transfers.
  • Ordinary gains on staking and lending.
  • Receiving crypto from airdrops, rewards, and mining income.
  • Crypto interest earnings from DeFi lending.
  • Crypto earned from liquidity pools and interest-bearing accounts.
  • Trading in coins, tokens, NFTs, and SAFE/SAFT agreements.

We provide specialized tax services tailored to the requirements of SPVs including analysis and tax adjustments for:

  • Schedule K-1 received from lower-tier SPVs, including multiple upper-tier investments.
  • Waterfall distributions for tax allocation.
  • Committed capital structures.
  • Business interest expense limitations.
  • Qualified business income deduction.
  • Global Intangible Low-Taxed Income (GILTI).
  • Foreign-Derived Intangible Income (FDII).
  • Carried interest rules under IRC Section 1061.
  • Qualified small business stock analysis under IRC Section 1202.
  • Itemized deductions and net operating losses.
  • Expensing and depreciation.
  • Effectively connected income (ECI) and withholding requirements.
  • Calculation of state-source income apportionment factors and state tax withholdings.

Our tax services are tailored to venture funds, providing comprehensive analysis and customized tax adjustments in areas including:

  • Schedule K-1 received from underlying venture investments.
  • Distribution waterfall for venture fund tax allocation.
  • Considerations for committed capital structures in venture funds.
  • Carried interest allocations and reporting as per IRC Section 1061.
  • Net investment income tax (NIIT) under IRC Section 1411, applicable to dividends, interest, and capital gains above certain thresholds.
  • Business interest expense limitations per IRC Section 163(j).
  • Treatment of qualified business income according to IRC Section 199A.
  • Considerations for managing tax obligations upon exit or liquidation of investments.
  • Analysis of qualified small business stock under IRC Section 1202.
  • Reporting of recourse and non-recourse liabilities.
  • Global Intangible Low-Taxed Income (GILTI).
  • Foreign-Derived Intangible Income (FDII).
  • Net operating losses and itemized deductions specific to venture funds.
  • Withholding requirements on effectively connected income (ECI) and fixed, determinable, annual, and periodical (FDAP) income generated by venture funds.
  • Calculation of state-source income apportionment factors and state tax withholdings.

We provide specialized tax services tailored to the requirements of hedge funds including analysis and tax adjustments for:

  • Incentive fee, profit tax, and management fee allocations.
  • Recharacterization of long-term capital gains (carried interest) as per Section 1061.
  • Stuffing allocations for redeemed partners and aggregate allocation of trading income, including full netting and partial netting approaches.
  • Calculation and allocation of business interest expense limitations as per Section 163(j).
  • Qualified business income deduction.
  • Passive activity losses and at-risk limitations reporting.
  • Section 475(f) mark-to-market allocation, Section 1256 contracts, straddle, short sales rules, and constructive sales adjustments and allocations.
  • Footnotes and relevant disclosures on Schedule K-1s.
  • Reporting dividend details, i.e., domestic vs. foreign, Sections 199A, 897, 1250, REIT dividends, capital gain distributions, etc.
  • Handling PTP and underlying investment Schedule K-1s.
  • Investor vs. trader analysis and its implications.
  • Itemized deductions and net operating losses.
  • Wash sale calculations.
  • Reporting of recourse and non-recourse liabilities.
  • Dividend expense adjustments as per Section 263(h).
  • Gross receipts calculations as per Section 448.
  • Contribution and distribution-in-kind adjustments.
  • Handling and reporting of cross-border investments.
  • Preparation of additional forms and schedules, including Forms 8865, 8804, 8805, 8949, 8990, etc.
  • Tax withholding and reporting for foreign investors.

Our tax services are tailored to private equity funds, providing comprehensive analysis and customized tax adjustments in areas including:

  • Schedule K-1 received from underlying venture investments.
  • Distribution waterfall for private equity fund tax allocation.
  • Considerations for committed capital structures in venture funds.
  • Carried interest allocations and reporting as per IRC Section 1061.
  • Net investment income tax (NIIT) under IRC Section 1411, applicable to dividends, interest, and capital gains above certain thresholds.
  • Business interest expense limitations per IRC Section 163(j).
  • Treatment of qualified business income according to IRC Section 199A.
  • Considerations for managing tax obligations upon exit or liquidation of investments.
  • Analysis of qualified small business stock under IRC Section 1202.
  • Reporting of recourse and non-recourse liabilities.
  • Global Intangible Low-Taxed Income (GILTI).
  • Foreign-Derived Intangible Income (FDII).
  • Net operating losses and itemized deductions specific to venture funds.
  • Withholding requirements on effectively connected income (ECI) and fixed, determinable, annual, and periodical (FDAP) income generated by venture funds.
  • Calculation of state-source income apportionment factors and state tax withholdings.