Carried Interest/Promote

This might be a little off-topic, but I was curious if anyone could give a basic explanation of how a carried interest might be structured in the following case:
A potential job opportunity (Investment VP position) is offering the potential for carried interest in any real estate deals that the VP sources. The job pays a base + bonus + potential carried interest. Would that mean that the VP would be "given" equity share in the deal? Or would it mean that upon sale, part of the profit would be given to the VP?
In Buying Property - Asked by Eric G. - Oct 12, 2010
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Answer(s)

Richard R.
Broker/Agent
Newport Beach, CA

They both mean the same thing. You need to ask them specifically how they structure the carried interest. In some cases you could be liable for any cash call so make sure you have all the details spelled out and that you ask the right questions.
Rick Russell

Oct 14, 2010
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Neal L.
Property/Asset Manager
Westport, CT

I would also add that you should also ask your account about the structure. Without going into too much detail, there are a number of tax issues to consider; is your carried interest earned upon closing of the deal and potentially considered taxable income, depreciation, how a sale or exchange of the property is treated, etc. Hope this is helpful.

Oct 16, 2010
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