Search Fund Tax Accounting | IRC 195 and Schedule K-1

January 20, 2022

by a searcher from Northwestern University - Kellogg School of Management in Key Biscayne, FL 33149, USA

For traditional search fund LLCs, does anyone know if the operating expenses during the search phase fall under start-up expenses that must be capitalized as defined by IRC section 195?

If so, what is the purpose of filing taxes and/or producing the K-1 schedules for LPs?

Thanks!