By Yuting Chen, CPA, Tax Manager
How recent tax law changes and IRS guidance may increase the importance of partnership-level reporting for corporate investors
As Corporate Alternative Minimum Tax (CAMT) guidance continues to evolve, investment managers should take a fresh look at their partnership reporting processes. The recently enacted One Big Beautiful Bill Act (OBBBA) has renewed attention on CAMT modeling because certain taxpayer-favorable provisions may affect taxable income differently than Adjusted Financial Statement Income (AFSI). As a result, corporate investors and the funds in which they invest may need to evaluate CAMT implications more closely. At the same time, IRS Notice 2025-28 continues to provide a framework for how partnerships and corporate partners obtain and report information needed for AFSI calculations. Together, these developments highlight the growing importance of partnership-level financial information for corporate investors.
For most investment funds, the issue is not whether CAMT applies directly, but whether existing reporting processes are equipped to provide the information investors may increasingly request and to meet the evolving reporting expectations.
What Notice 2025-28 Means for Fund Finance Teams
Notice 2025-28 provides additional guidance intended to simplify how partnerships and corporate partners apply CAMT. The guidance introduces new elections, updated reliance rules, and a practical framework for obtaining the partnership-level information corporate investors need to calculate AFSI.
For investment managers, this reinforces the importance of consistent financial reporting and coordination across fund operations.
Why OBBBA Makes CAMT Planning More Relevant
Although OBBBA introduced several taxpayer-favorable regular tax provisions, those benefits may not always reduce AFSI in the same way they reduce taxable income. For example, certain accelerated tax deductions may reduce taxable income while producing little or no corresponding reduction in financial statement income. This mismatch may increase the likelihood that certain corporate investors will need to evaluate CAMT exposure more closely. CAMT considerations will remain an important part of the tax planning discussion for investment structures that include corporate stakeholders.
Which Fund Structures Are Most Likely to Be Affected?
Organizations that may experience the greatest operational impact include:
- Private equity funds with corporate limited partners
- Hedge funds with corporate investors
- Venture capital funds backed by corporate strategic investors
- Real estate funds utilizing blocker corporations
- Fund-of-funds investing through multiple partnership tiers
- Investment managers overseeing complex entity structures
The more complex the ownership structure, the more valuable standardized reporting processes become.
Four Questions Fund Managers Should Be Asking
- Do we know which investors may require CAMT-related reporting?
Identifying corporate investors early can help establish reporting expectations and reduce last-minute information requests.
- Can our current reporting support AFSI calculations?
Existing partnership reporting may not capture every financial data element corporate investors need. Reviewing current reporting processes now can help identify potential gaps before reporting deadlines.
- Are our service providers aligned?
Fund administrators and other service providers may need updated processes to collect and communicate CAMT-related financial information consistently across funds and investors.
- Have we evaluated blocker corporations and SPVs?
Blocker corporations and special purpose vehicles can add complexity to partnership reporting. Understanding how these entities fit within your reporting framework may help improve consistency and efficiency.
Preparing for CAMT Reporting After OBBBA
Notice 2025-28 provides welcome guidance on applying CAMT to partnership investments, while OBBBA highlights that regular tax and AFSI outcomes may diverge. Together, these developments reinforce the need for investment managers to evaluate available elections, understand reporting requirements, and confirm that existing reporting processes can support evolving CAMT requirements.
As CAMT guidance continues to evolve, private funds will benefit from proactively evaluating whether existing reporting processes remain sufficient for a changing tax landscape.
Keiter’s Financial Services Industry team can help your organization evaluate the operational impact of Notice 2025-28, strengthen partnership reporting processes, and prepare for evolving investor reporting requirements. Contact your Keiter Opportunity Advisor | Email | Call 804.747.0000
About the Author
Yuting Chen, CPA, Tax Manager
Yuting has over five years of experience in public accounting providing tax services to public and private entities and their owners. She specializes in multi-state taxation, C-corporate taxation, and private investment funds taxation.
More Insights from Yuting ChenThe information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.
