WashingtonRealShare conference, held Tuesday.

"What we have now is a situation where the House bill on taxextendersneeds to be conferenced but the revenue sources in theSenate bill aregone," he tells GlobeSt.com. "The temptation toadopt the House provisions on carriedinterest will besignificant."

To fully understand the stakes some background is in order,startingwith the tax characterization of carried interestitself.Carried interest is the percentage of a fund, joint ventureorlimited partnership's profits that a general partner takesascompensation. Many real estate partnerships are structured aroundthisconcept, with developers taking much of their compensation thisway in lieu of a salary. These proceeds are taxed at the capitalgains tax rate of 15%. Changing that characterization to ordinaryincome would essentially triple the tax rate.Even with a workingcapital market system and robust commercial real estateenvironment, the carried interest proposal has been viewed as aserious threat tofunding real estate. A Real Estate Roundtablestudy in 2007 found thatthe cost of the proposal to the industrycould reach as much as $20billion.