The Carried Interest is the share of the Funds profits allocated to the General Partner (§ 1.2). On the last day of the Fiscal Year (§ 1.5) based on the Mark-to-Close value, Unicorn Capital Partners, LLC shares in the profits of the Unicorn Pairs Fund, LP, and this sharing of profits, is considered Carried Interest. The sharing of profits is performance based. If the performance is above the High Water Mark (§ 3.4), in addition to the 2% Management Fees (§ 3.5) charged monthly, 20% of the amount above the High Water Mark is allocated to the General Partner from the Fund’s profits. The sharing of profits is returned to the General Partner as a transfer of ownership of the Fund. If the General Partner sells any of the ownership, it is taxed as ordinary income if held for less than a year but is taxed as long-term capital gains if held over a year. All profits made from Carried Interest are considered short term capital gains and are taxed as ordinary income.