An incubator fund is the least expensive and most flexible hedge-fund business plan around! See our articles below to learn about incubator funds.

The incubator fund is designed for your own money only, and the documents are simplified accordingly. The friends-and-family incubator fund has similar documents to a for-profit hedge fund, minus the compensation clauses. Consult with an outside attorney about starting an incubator fund.

Green NFH, LLC offers tax compliance (annual tax preparation and planning) and assurance (audit and attest services). Other accounting firms offer monthly or quarterly accounting.

The incubator fund is generally structured as an investment fund vehicle like a Delaware Limited Partnership (LP) or Limited Liability Company (LLC). Your management company is generally formed in your home state, if needed to start. Plus, your attorney should consult with you on various restrictions and a road map on how to proceed, so as not to go beyond the bounds of trading your own money, or friends and family money in the incubator fund. The attorney's heavy lifting on the fund paper work including private placement memorandum, LLC operating agreement, and subscription materials can wait until friends and family join. Compensation clauses are added when you go to the final phase. Your attorney should consider important licensing, registrations, and other plans in phase I too. Read about Phase I and II in the articles below.

The benefit of starting an incubator fund is that you can begin generating a historical performance record now and wait on completing the setup of a hedge fund (Phase II) that can be offered to others when the fund has a performance record. This takes considerable start-up risk capital off the table. Green NFH, LLC can perform your assurance services. Learn more how we can help you in our Dec. 5, 2012 blog.

Green NFH, LLC can handle the tax compliance (preparation of your annual income tax return filings) for a reasonable cost, less than what full-fledged hedge funds pay.

Incubator funds can be scaled up to hedge funds or scaled down to a good solution for trading your own funds too. Many of our incubator fund clients engage Green NFH, LLC for tax compliance services years before they decide to have audited financial statements.

Learn more about incubator funds in our Webinar recordings and read our blog dated Feb. 10, 2011: "Incubator Funds." (Note, we invented this concept in early 2000s and have set up hundreds of incubator funds since. When we published this blog, we were not offering assurance (audit/attest) services, so we could be involved with assisting on development.)

To learn more about our assurance and tax services for incubator funds and hedge funds, read our latest blog dated Dec. 5, 2012: "Investors in hedge funds depend on “assurance” from quality independent CPA firms."

If you have any questions about incubator funds, or would like to get started, please email and/or call us.

Many Webinars in March

Highlighted Recent Recordings:

*Entities & Retirement Plans for Traders
*Trader Tax Law Update: Current Developments
*2013 Tax Reporting & 2014 Planning
*Forex Taxation
*Audits of Performance Records
*Kick-Off to 2013 Tax-Filings for Traders
*ObamaCare taxes are starting to affect traders
*The Tax Court Was Right To Deny Endicott Trader Tax Status
* Investment management: Key updates
*Learn the DOs and DON’Ts of using IRAs and other retirement plans

Trader Tax Center

Tax Newsletter & Calculators

Highlights (see the full archive):

Mar 27: Protect yourself from market losses with a Section 475 MTM election Read More

Mar 25: IRS guidance on bitcoin transactions will chill its use Read More

Mar 24: SEC Large Trader Reporting Rule Read More

Feb. 27: Another trader tax court loss (Assaderaghi) Read More

Feb. 1: Net investment tax details Read More

Jan 14: New IRS guidance on SE tax deductions affects partnership AGI-deduction strategies. Read More

Jan 9: A major tax reform bill in 2014 is unlikely, and “tax extenders” may be history, too. Read More

Jan 7: Kick off to 2013 tax filings for traders. Read More

Dec 4: IRS final regulations for Net Investment Tax help traders. Read More

Dec 3: Bitcoin is a hot commodity, but is it taxed like commodities, assets, or currencies? Read More

Nov 15: Another non-business trader gets busted in tax court trying to cheat the IRS. Read More

Nov 6: Hedge fund investors depend on “assurance” from quality independent CPA firms. Read More

Oct 29: ObamaCare taxes are starting to affect traders. Read More

Sept 15: Not Easy For New Yorkers To Escape Big Apple's Tax Bite. Read More

August 30: The Tax Court Was Right To Deny Endicott Trader Tax Status Read More

August 18: Common trader tax mistakes Read More

July 24: Learn the DOs and DON’Ts of using IRAs and other retirement plans in trading activities and alternative investments Read More

March 31: PFG investors can deduct theft losses on 2012 tax returns with Rev. Proc. 2009-20 safe harbor relief. That’s great news! Read More

March 5: Caution, downloading securities Form 1099-Bs into TurboTax often leads to incorrect tax filings Read More

Sept 5: High-income traders and ObamaCare’s 3.8% Medicare tax Read More

GreenTrader blog archive, Forbes blog, Benzinga blog.


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