Tax Services
Formidium offers a full suite of tax services to address the complexities and challenges in tax calculations, reporting, and filings for digital asset funds. We help a vast global network of managers and funds (including hedge and private) with our all-inclusive tax services.
Why Formidium Tax Services ?
Using our proprietary technology, our tax specialists provide you with industry-leading tax support coupled with the highest level of client service.
We are located in Downers Grove, IL serving the tax reporting needs of over 600 clients and have licensed CPAs leading our tax practice. Our tax service team of more than 75 experienced and qualified professionals is prepared to handle tax filings and reporting of schedule K-1s for your investors. The in-house technology platform we use allows us to fetch, clean, and sanitize transactional data, calculate capital gains/losses using various methods, reconcile and process a high volume of data, and tax lot accounting.
Cutting-edge technology and first-class client service are at the core of everything we do.
Services We Offer
Our comprehensive tax services span your entity's entire lifecycle, and include:
- Review of private placement memorandum tax section.
- Preparation of U.S. federal returns (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. (Form 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 with foreign investments. (Form 5471, 8865)
- U.S. tax reporting and compliance for Non-U.S. investors. (Form 1042, 8804, 8805)
- Preparation of international reporting tax forms K-2 and K-3.
- Preparation of other miscellaneous forms like Form 1099s, name change, address change forms, and many more.
- Preparation of responses to IRS and state revenue notices.
- Offering and organizing cost amortization, book-to-tax reconciliations, maintaining tax basis for investor's capital and fund's investment, and handling the assignment of interest from one investor to another.
- Tax lot level capital gain/loss calculations, wash sales calculation.
- Carried interest reporting under IRC 1061.
Our comprehensive tax services span your entity's entire lifecycle, and include:
- All the items covered for U.S. Funds/Entities.
- Preparation of foreign partnerships, blocking corporations' tax returns, including foreign master-feeder structures.
- Analysis of the entity's structure to determine its applicable U.S. tax filings. (Passive foreign investment company vs. controlled foreign corporation determination)
- Filing applicable tax forms for Non-U.S. funds/entities, including Form 8621, 5472 reporting.
- Preparation of K-1 equivalent forms for Non-U.S. entity/fund's investors, including PFIC/CFC reporting.
We provide specialized tax services tailored to the requirements of crypto & SPV funds including analysis and tax adjustments for:
Crypto Specific Tax Services
- Contribution-in-kind and distribution-in-kind.
- Wallet-to-wallet transfers.
- Ordinary gain on staking and lending.
- Receiving crypto from an airdrop, rewards, and mining income.
- Crypto interest earnings from Defi lending.
-
Crypto earned from liquidity pools and interest-bearing
accounts etc. - Trading in coins, tokens, NFT, SAFE/SAFTs.
SPV Specific Tax Services
- Schedule K-1 received from upper-tier SPV (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)
- Carry rules under section 1061.
- Qualified small business stock analysis under section 1202.
- Itemized deductions and net operating losses.
- Expensing/depreciation.
- Effectively connected income and withholdings.
- State source income apportionment factor calculation, state tax withholdings, etc.