Scope of Services: Carta Fund Tax Preparation

Carta Fund Tax Preparation is an add-on service not included in your Carta Fund Administration subscription. Per annum pricing will be determined based on your individual fund structure, needs, and complexities.

Fund Tax Preparation - Base Services

Included in the base Carta Fund Tax Preparation package, Carta will work with you to:

Prepare and file your fund’s federal tax return (Form 1065)
Prepare and distribute Schedule K-1s for partners
Prepare and file required state tax returns when necessary for federal compliance or investor (LP resident) state obligations; state-only filing services are not provided

Additional entities, such as parallel, feeder, or blocker entities, require separate subscriptions.

Extensions

Carta’s tax return filing services are contingent upon tax extensions. Carta will file extensions with the IRS and any applicable states on the taxpayer entity’s behalf.

For state extensions, Carta determines residency state filing requirements based on partner addresses that have been provided by Client byJanuary 31 following the tax year. Carta is not responsible for late filings due to missing or incorrect state residency information.

Final Tax Year

You must promptly notify Carta Tax of any planned wind-up or dissolution of your entity. Extensions must be filed within 2.5 months of dissolution. Carta will assist with preparing your entity’s final year tax return. Payment for tax return preparation services will be due at the time of dissolution.

International Add-On Package

For funds with international investments or partners, you will require additional services not included in the base services. The international add-on package includes:

Up to 5 international holdings
- Does not include the following Additional Tax Preparation Services (see below - provided for an additional fee):
  - Testing for passive foreign investment companies and/or filing of Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund
  - International holdings over 10% or over 50%
    - Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations
    - Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business
    - Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships
  - Form 8938, Statement of Specified Foreign Financial Assets
Up to 20 international partners
- Includes:
  - Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, and Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding (where necessary)
  - Form 8804, Annual Return for Partnership Withholding Tax (Section 1446), Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, Form 8813, Partnership Withholding Tax Payment Voucher (Section 1446) (where necessary)

Additional Tax Preparation Services

Depending on your entity structure, you may need certain additional forms or services that are not included in the base Carta Fund Tax Preparation subscription.

Foreign portfolio holdings (with additional complexity for those with >10% or >50% ownership)
Foreign partners
Foreign bank accounts
Investments in cryptocurrency, tokens, token warrants, NFTs or other digital assets
Pass-through or fund of fund investments
Other filings as needed based on fund characteristics

Additional Tax Preparation Services are provided for an additional fee. Talk to your Carta representative to discuss any filings not listed above. If not included in engagement letter pricing, fees will be billed to Client upon completion of tax filing.

Not Supported

While most funds are able to be serviced by Carta Fund Tax, the product will be unable to support funds with any of the following non-standard characteristics:

Entities not administered through Carta
Any other non-standard characteristics as identified by Carta from time to time

Client Responsibilities

Required Information

Prior Year Tax Returns: Client shall provide Carta with the entity’s previous tax documents, if any. If applicable, Client shall facilitate the transfer of prior year tax data from the prior year tax provider to Carta.
Approval of Extension Filing: Carta will automatically file extensions for all taxpayer entities. Where necessary, Client shall provide written approval and/or signature for such extension.
Fund Information Accuracy: Client must confirm the fund’s data in the Carta platform, including but not limited to the asset(s) held, by January 31 of the year of the applicable tax filing deadline.
Investor Information Accuracy: Client is responsible for the fund’s investors confirming their respective tax information in the Carta platform by January 31 of the year of the applicable tax filing deadline.
Additional Information: Client will furnish any additional documents or data as reasonably requested by Carta in order to facilitate service, delivery and completion of service.

Review, Approval, and Filing

After Client has submitted all required information, Carta will prepare tax returns and provide returns to Client for review in the Carta platform
Client shall provide final approval and sign the e-file authorization(s) in the Carta platform. After Client authorization is finalized, Carta will electronically file tax returns with the IRS and applicable states.

Conditions

If the above deliverables are not received, the above deadlines are not met, or if Client or Client’s investors provide incorrect information:

Carta shall not be responsible for any interest, fines, or penalties due to late or incorrect filings.
Carta shall not be responsible for late tax payments.

Filing Superseded Returns / Amended Returns and/ or Notice Responses and/or Abatement (if eligible)

Depending on your needs, there may be a need for certain additional forms or services to be filed to the Tax authorities that are not included in the base Carta Fund Tax Preparation subscription including:

Prepare and file Superseded returns
Prepare and file Amended returns
Prepare and file Notice Responses and/or Abatement (if eligible)

Client Responsibilities

Required Information

Updating Tax Workpapers and Tax Return (s): Client must update Carta confirming that they will need to file for Notice Responses and / or Abatement (if eligible), Superseded Returns and Amended Returns

Review, Approval, and Filing

After Client has submitted all required information, Carta will prepare Superseded tax returns (if applicable) and provide to Client for review in the Carta platform.
In the event of any impact to K-1s based on the updated information shared by the Client, Carta will share the updated K-1, if applicable, with Client for review and approval.
Carta will share amended tax returns (if applicable) via dataroom links or box links.

By engaging Carta, Client authorizes Carta and its affiliates to review all information about Client and its partners that Client or its partners provide to or receive from any Carta affiliate.

Carta reserves the right to reassess the fee structure for tax preparation services if there are changes to tax laws or regulations that result in a material increase in the complexity of Carta’s services. Carta shall provide Client with at least 30 days’ notice in advance of any such fee increase.

Additional terms and conditions apply: https://carta.com/legal/agreements/tax-preparation-product-specific-terms

DISCLOSURE: This communication is on behalf of eShares Inc., dba Carta, Inc. ("Carta"). This communication is not to be construed as legal, financial, accounting or tax advice and is for informational purposes only. This communication is not intended as a recommendation, offer or solicitation for the purchase or sale of any security. Carta does not assume any liability for reliance on the information provided herein.