In a four-part guest series, Arthur H. Kohn, partner at Cleary Gottlieb, along with Andrew L. Oringer and Steven W. Rabitz, partners at Dechert, summarize the principal U.S. federal income tax and related design considerations associated with carried interest arrangements for individuals who are employed by or otherwise provide services to sponsors of private investment funds. This fourth article explores practical and design considerations related to profits interests in a tax partnership, including forfeitures and the structuring and administration of profits interests, as well as deferred compensation arrangements. The first article provided background on carried interest arrangements and examined relevant analytical considerations. The second article discussed other practical and design considerations, including 83(b) elections; fee-waiver provisions; and the tax treatment on the repurchase or disposition of profits interests or the payment in liquidation of profits interests. The third article reviewed the treatment of profits interests and capital interests as separate interests in a partnership; dual-status issues; phantom income; and tax distributions. For additional commentary from Oringer and Rabitz, see “RCA PracticeEdge Session Highlights the Key Points of Intersection Between ERISA and Private Fund Investments and Operations” (Jul. 18, 2014); and “Is That Your (Interim) Final Answer? New Disclosure Rules Under ERISA to Impact Many Private Funds” (Aug. 20, 2010).