Phantom income refers to tax liabilities that arise from investment gains allocated to an investor but never received in cash. It is a recurring challenge for ultra-high-net-worth families, particularly those with exposure to private equity, hedge funds, private credit, and carried interest structures.
If unaddressed, phantom income can disrupt liquidity, trigger unplanned asset sales, and complicate estate or trust planning.
Our Chief Tax Strategist Jeff Getty recently laid out some considerations to avoid these traps in a guest column for VettaFi Advisor Perspectives.