For sponsors of private funds with non‑U.S. investors, considerable time and expense is committed to structuring those funds in a manner to mitigate, as much as possible, any adverse tax consequences that could flow through to those investors. One of the biggest risks faced by non‑U.S. investors is for them to be subject to U.S. tax on income that is treated as being effectively connected with the conduct of a U.S. trade or business. A ruling by the U.S. Tax Court (Court) in YA Global Investments, LP v. Commissioner addressed that topic in the private funds context, raising concerns about tax structuring practices that need to be modified going forward. That topic was discussed in a program hosted by Strafford CLE Webinars in a panel that featured Mayer Brown partner Mark H. Leeds, KPMG partner Jay Freedman and BlackRock’s global co‑head of alternatives tax Sarah Ryan. This second article in a two-part series analyzes the seven primary issues raised in YA Global, how the Court ruled on each item and potential alternative considerations private fund managers should weigh as to each topic. The first article summarized the tax rules implicated by YA Global, along with pertinent facts from the case that contributed to the Court’s ruling. See our two-part series: “Synopsis of the IRS Partnership Audit Process and How It Can Be Addressed in Fund Documents” (Jun. 16, 2022); and “Modifications, Amended Returns and Push‑Out Elections As Cures for Imputed Underpayments From IRS Partnership Audits” (Jun. 23, 2022).