Convert Management fees into Investment Income?

[AZ-Tax]

This is over my head:
"Schneiderman is investigating "management fee waivers," in which private equity managers convert portions of their pay into investment income, reducing the tax rate on that pay to 15 percent. That is the same rate they pay for "carried interest," a related form of investment gain that the managers get from the business of buying, managing and selling companies".

Have I been missing out on something all this years. Was I able to convert some of my Sch C net profits into investment income?

http://news.yahoo.com/irs-warned-did-not-act-tax-strategy-private-202019424--sector.html

[ChEAr$]

Perhaps so, but first and foremost, you need a catchy business name, like.... oh... "Bane Capitol".
(grin

[veritas]

Sounds like

a tax loophole.

Like the one for S Corporations beating SE tax.

Or clergy claiming exempt status from SE tax.

Or politicans exempting daily per diems if they live more than 50 miles from their office.

Refundable child credits for children whether here legally or not.

[Roberts]

As I understand it, they supposedly voluntarily give up their management fee in exchange for a financial participation in the deal they are working on. If you give money to your local Washington politicians you may find this is applicable to your business model also.