As with any investment, each potential investor in the iSelect Fund should consult with his or her own tax professional about the tax consequences of an investment in an iSelect Fund. The following tax information is for general purposes only and is not specific tax advice for any person.
Each iSelect Fund is a Delaware limited liability company (LLC). Limited liability companies such as the iSelect Fund that do not elect to be treated as a corporation for tax purposes are generally not subject to U.S. federal income tax at the company level. As a result of owning a series within the iSelect Fund (seeFUND STRUCTURE, WHAT DOES AN INVESTOR OWN?) each investor is a “member” of the iSelect Fund. The investor, as a member of a limited liability company, includes the iSelect Fund’s items of taxable income, gains, losses, deductions, and credits attributable to the companies within the member’s series LLC in determining the member’s taxable income, whether or not cash is actually distributed to the investor. Consequently, an owner of a series of the iSelect Fund may be allocated taxable income even though he or she has not received a cash distribution in respect of such income (similar to a typical mutual fund). All such items are deemed to pass from the iSelect Fund to investors on the last day of the taxable year of the iSelect Fund (currently December 31). iSelect requires that portfolio companies agree to make distributions to cover any tax liability attributable to investors in the portfolio company. Investors must recognize, however, that such distributions can be made only to the extent that the portfolio company has cash available to distribute.