May 7, 2026
Adapted from a Thelander webinar with Jodie Thelander (J. Thelander Consulting) and Al Chesser of GetDynasty, a licensed Nevada trust company specializing in QSBS (Section 1202) planning.
For investment firm professionals, carried interest is where the wealth is created — and QSBS (Qualified Small Business Stock) is one of the most powerful, and most underused, tools for keeping more of it. This session paired investment-firm compensation data with QSBS trust strategy to show how GPs and LPs can maximize wealth and minimize taxes.
How Investment Firm Compensation Is Structured
Investment firm pay breaks into cash (base salary plus actual bonus, with target bonus tracked separately) and carried interest — a percentage of a fund’s profits, typically on an 80/20 split (80% to LPs, 20% to GPs). The clearest lens for reading a firm’s compensation and carry structure is assets under management: as AUM grows into the multi-billion range, total comp and carry both get more robust, partly because larger capital contributions are required. Firms are surveyed across six levels of investment professional (associate up to managing GP) plus operations, portfolio services, and investor relations roles.
What QSBS Is — and the New Rules
QSBS lets you exclude capital gains from qualifying investments, but it only applies to US C-corps and US taxpayers — geography and residency matter. There are now “old rules” and “new rules,” split by the July 4, 2025 tax bill. Under the old rules, investing before a company crossed $50M in assets yielded up to $10M in tax-free gains per individual; the new rules raise the exclusion to $15M. That exclusion is 100% tax-free federally, and also tax-free at the state level in 42 of 50 states (8 do not recognize QSBS). Crucially, it passes through the fund directly to the GPs and LPs holding carry.
Stacking Exemptions With Trusts
The key question for a GP: can you personally make more than $10M on a single investment? If not, there’s little to optimize — you get your federal exemption and that’s that. If yes, trusts change the math. You get your own $10–15M exemption, and by creating separate trusts for your spouse, children, and other family members, each trust gets its own exemption. Three children could mean an additional $30–$45M of QSBS. This is done by gifting a “vertical slice” of your carry into each trust — and a critical rule: if you also have committed capital in the fund, you must move a proportional slice of that capital interest too (gift 10% of carry, and the trust takes on 10% of the capital commitment, including future capital calls).
Gift Early, When the Carry Is Worth Nothing
There is a $15M lifetime gift limit — total, across all trusts and family members — and every dollar over it is taxed at roughly 40% (the federal gift tax). That is exactly why timing matters: the best moment to gift carry into a trust is early, when a new fund’s carry is worth almost nothing, so it barely consumes your lifetime exemption. With vesting times lengthening, early-stage investors have runway to plan. The cautionary tale repeated throughout: once an exit is essentially locked (a binding LOI), it is too late — the IRS treats a last-minute trust transfer as still your money, so no separate exemption. People who never expected a $30–$40M single-investment outcome have been caught out. Earlier is always better.
Why Nevada Trusts
GetDynasty sets up trusts exclusively in Nevada, considered the best trust jurisdiction in the country: trusts can last 365 years, there are no state taxes, and Nevada has among the strongest asset-protection laws anywhere — shielding the trust from lawsuits, creditors, bankruptcy, and divorce. A useful wrinkle: even a New York resident who gifts ownership into a properly structured Nevada trust has that trust taxed in Nevada, avoiding state tax.
A Few Practical Q&As
QSBS itself requires no special filing like an 83(b) election — you simply need to know which investments are QSBS-eligible so your CPA can treat them correctly at tax time. If you join a firm after a QSBS investment was made but hold carry in that fund, you can still benefit. And QSBS has been genuinely bipartisan since President Clinton enacted it in 1993 — every administration has kept or expanded it. As Chesser framed it, it is not just a rich-person exemption but “rocket fuel for the startup ecosystem,” incentivizing early-stage investment, which creates more companies, more hiring, and tax savings that get reinvested back into startups.
The Bottom Line
Investing is now a genuine career track, with associates moving up over time — and the wealth creation can extend well down the org chart. The consistent message: get your house in order. Understand not just what you own but how you own it, ask the right questions about your carried interest and carry dollars at work, and plan for wealth creation early — because by the time the upside is obvious, the best planning windows have usually closed.
This article is adapted from a Thelander webinar and is intended as general educational information, not legal, tax, or investment advice. QSBS and trust rules are complex and fact-specific — consult qualified tax and legal advisors before acting.