10. Do Funds and Syndicates pay taxes?

Funds and Syndicates formed as Delaware Limited Partnerships and Series LLCs are pass-through entities. This means that Funds and Syndicates do not pay taxes themselves and ‘pass’ tax obligations to their investors. Therefore, investors pay taxes based on their share in Fund’s (or Syndicate’s) income (or losses) for the particular year.

However, a Fund (or a Syndicate) should annually provide each investor with a tax form reflecting this investor’s gains and losses resulting from its participation in a Fund (or a Syndicate). This form is known as K-1 Form.