Is a GP who takes salary from a Fund considered an employee, and does the GP pay regular income taxes on this compensation?

Most emerging managers setup their Management Company to be distribution focused. Please review this chart: https://vcl.to/ManCo-strategy With a distribution focused approach, the ManCo does not have payroll like an operating company. Instead, the ManCo routes the management fees from the fund to the Managing Partners. Then, it's up to the Managing Partners to manage the distribution how they see fit. Since you will have all of your receipts/transactions for your expenses as well as your income (management fees), your accountant will have everything they need to do your personal taxes.