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My friend told me that when people invested in hedge funds, they don’t pay taxs on the profits untill they cash the money out of the funds?
Is that true? If so, how does it work?
If friend is nuts, plz let me know too.
How about specificly hedge funds that invest specifically on commodity/futures market?
Eventhough investors of hedge funds doesn’t cash out every yeat. Hedge funds does make profit (not just paper profit, real profit) on their investments. Doesn’t the fund itself has to pay tax?
Is there any reference/detail on tax for hedge funds under this kind situation that you can tell me about?

thanks.