Carried Interest & Tax Strategy Calculator

Model the gross and after-tax value of your carry, the impact of tax-loss harvesting, and the estate-planning upside of gifting carry early at a discounted value.

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I
Section One

Gross Carry Calculation

Full waterfall

Fund & Your Position

$
%
%
x

Vesting

Waterfall Assumptions

%

Your Carry

Total fund value at exit$0
Total fund profit$0
Total GP carry pool$0
Vested fraction0%
Your vested carry$0
II
Section Two

After-Tax Carry & Tax-Loss Harvesting

on vested carry at exit

Capital Gains Tax

%

2026 brackets by taxable income: 0% up to $49,450 single / $98,900 married; 15% up to $545,500 single / $613,700 married; 20% above. Carry almost always lands in the 20% bracket.

NIIT applies when modified AGI exceeds $200,000 (single) / $250,000 (married). It applies to virtually all carry recipients.

Carried interest must be held 3+ years (IRC §1061) to qualify for long-term treatment. Held less than 3 years, gains are taxed as short-term / ordinary income.

Your Taxable Portfolio

$K
%

How much of the portfolio is already unrealized gain. The higher this is, the less a long-only book can harvest; long-short is largely unaffected because its shorts keep producing losses.

Long-only harvested losses 12% of portfolio
8%18%
Long-short harvested losses 40% of portfolio
30%60%

Conservative cumulative net realized losses over the program's life. Research suggests long-only direct indexing can reach ~30% of capital and tax-aware long-short can exceed 100%; these defaults sit well below that, and the adjustable range is intentionally narrow.

After-Tax Result

Your vested carry (gross)$0
Blended cap gains rate0%
Tax owed on carry$0
After-tax carry$0

Value of Tax-Loss Harvesting

Long-Only
$0
tax saved
Long-Short
$0
tax saved
Embedded unrealized gain in portfolio$0
Latent tax if realized today$0
After-tax carry, with long-short harvesting
$0
III
Section Three

Estate Tax & Early Gifting to an Irrevocable Trust

2026 rules

Estate Profile

$
$

Projection Assumptions · applies to all of Section 3

%

The return you expect to keep earning on these assets if they stay invested. Used to grow the estate to its value at transfer.

Applies to the federal and state exemptions in the Future column. Uncheck to hold exemptions flat (more conservative).

Gifting Strategy

%
%

A · Estate Tax Exposure

After this carry
Current
Future (20y)
Taxable estate
$0
$0
Federal estate tax
$0
$0
State estate tax
$0
$0
Total estate tax
$0
$0

B · Value of Gifting to an Irrevocable Trust

Estate tax — no planning$0
Carry value gifted today$0
Exemption used today (discounted)$0
Future value, grown outside estate$0
Estate tax — with gifting$0
Estate tax saved by gifting early
$0
Transparency

Sources & Assumptions

Figures reflect 2026 federal law and current state rates. Tax facts are sourced and dated; modeling choices are labeled as VDB illustrative assumptions and are not guarantees.

Current tax facts · as of 2026

  • Federal long-term capital gains rates of 0%, 15%, and 20%, with 2026 breakpoints (0% up to $49,450 single / $98,900 married; 20% above $545,500 / $613,700).IRS; Tax Foundation
  • Net Investment Income Tax of 3.8% above modified AGI of $200,000 (single) / $250,000 (married).IRC §1411
  • Carried interest must be held three or more years to qualify for long-term treatment.IRC §1061
  • State capital gains top rates: CA 13.3%, NYC 14.8%, NY 10.9%, NJ 10.75%, OR 9.9%, MN 9.85%.State revenue depts.
  • Federal estate & gift exemption of $15M per person ($30M married), made permanent.2025 OBBBA; IRS
  • Top federal estate tax rate of 40%.IRC §2001
  • State estate tax exemptions and top rates: NY ~$6.94M/16%, MA $2M/16%, WA $2.193M/up to 35%, OR $1M/16%, IL $4M/16%, CT $13.99M/12%, MN $3M/16%.State statutes

Modeling assumptions

  • Tax-loss harvest rates of about 12% of capital (long-only) and 40% (long-short), set conservatively below the ~30% and 100%-plus cumulative net losses found in research.AQR; Elm Wealth
  • Embedded gains reduce long-only harvest capacity in full and long-short at roughly one-quarter weight.VDB illustrative
  • Gifting valuation discount defaults to 12% of value as a placeholder; an actual gift requires a qualified independent appraisal.VDB illustrative
  • Carry waterfall is whole-fund (European), with carry on profit above return of capital and a soft hurdle satisfied by a 100% GP catch-up.Model convention
  • Vesting is straight-line over the vesting period.Model convention
  • Exemptions are optionally indexed at 3% inflation; estate tax is applied at a flat 40% above the exemption (the federal schedule actually graduates from 18% to 40%).Model convention

Deliberately excluded

  • Clawback, GP commitment, and management fee offset within the carry waterfall.
  • Income tax owed on the carry asset is not netted from its estate value (gross value is used).
  • Timing and present value of distributions.
  • The model assumes the carry qualifies for long-term capital gains treatment.
  • State income tax treatment of carry beyond the capital gains rate entered.

For illustration only. This calculator uses simplified assumptions and does not constitute tax, legal, or investment advice. Carry waterfalls, vesting, valuation discounts, harvesting outcomes, and state estate taxes vary by fund and jurisdiction. The estate projection grows assets at the chosen rate while holding exemptions flat unless the inflation option is selected. Married status doubles both the federal and state exemptions; in practice many states lack spousal portability and require credit-shelter trust planning to use both amounts. 2026 federal figures: estate/gift exemption $15M per person ($30M married, permanent under the 2025 law); top long-term capital gains rate 23.8% (20% + 3.8% NIIT).

VDB Wealth LLC is a registered investment adviser located in the State of Georgia. Registration as an investment adviser does not imply a certain level of skill or training.

The information on this website is for informational purposes only and does not constitute investment, legal, tax, or financial advice. Nothing on this site should be interpreted as a solicitation, offer, or recommendation to buy or sell any securities or investment products. All investments involve risks, including the potential loss of principal.

VDB Wealth LLC provides investment advisory services only to residents of states where it is properly registered or exempt from registration. Past performance is not a guarantee of future results.

VDB Wealth LLC | (414) 975-7007 | andy@vdbwealth.com