Senate Finance Committee Chairman Orrin Hatch is continuing to meet with members, taxpayers and other stakeholders to address any concerns with the new law and examine potential technical corrections, should be they be needed, said Julia Lawless, a spokeswoman for the panel.

In a Jan. 18 note, KPMG said that it was “difficult to determine” the exact effect of the law’s carve out for capital contributions.

In early December, Tepper along with other Appaloosa insiders created a new fund called Azteca Partners LLC that they have full ownership of, filings show. The purpose was to put the realized gains in a separate vehicle, according to a person familiar with the manager’s thinking who asked not to be named because the matter is private.

Tepper’s ownership of one of the Appaloosa funds -- Appaloosa Investment LP I -- declined to zero from 80 percent by the end of December, and its assets dropped to $2.1 billion as of Dec. 31, from $9.3 billion a year earlier, as he shifted the realized gains out. Azteca had $9.6 billion as of Dec. 31.

A spokesman for Appaloosa declined to comment.

Margolies’ Moves
Margolies took a similar approach and also shifted some of his realized gains into a new entity, according to a person familiar with the move who asked not to be named because the matter is private.

A spokesman for Stelliam declined to comment.

David Logan, the financial services industry tax practice leader at accounting firm CohnReznick, said he worked with clients to divvy up carried interest profits last year, but declined to name them.

Some managers may have pursued a more aggressive move to exempt a portion of their unrealized, untaxed gains from the three-year requirement. The strategy involved shifting those gains out of the general partner’s account, sometimes into a new entity, theoretically recasting them as a capital contribution from a limited partner.

Limited Partners
A Feb. 21 presentation from Morgan, Lewis & Bockius advised managers to consider preserving unrealized gains by having the funds distribute underlying securities or financial instruments to the manager, who would recontribute them to the fund. The move would effectively render the manager a limited partner with an exempt capital contribution. “It depends on the taxpayer’s risk tolerance,” said Jason Traue, a Morgan Lewis tax lawyer. He added that moving realized gains was a safer approach because unlike unrealized gains, they’ve already been taxed.