WASHINGTON, DC-The last the commercial real estate industryheard of the proposal to change the tax characterization of carriedinterest was after it was passed in the House of Representatives,attached to a bill extending certain business tax subsidies. Then,election season came and went and it remains in the Senate,stillawaiting action during this lame duck session.

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There is a chance that it could be revived and pushed past thefinish line--especially as both Congress and President Obama aremoving closer on an agreement on the larger tax issues that havegrabbed the headlines in recent months.

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If the tax characterization is changed, Real Estate Roundtable’sJeff DeBoer tells GlobeSt.com, it won’t likely be through a formalor technical process such as the one that unfolded in the Houseearlier this year. “Probably what would happen is a lessprocess-oriented agreement with congressional leaders and the WhiteHouse will take place in which they will decide how to deal withbigger issues of individual tax rates and the alternative minimumtax and the estate tax. At this point they will also have somebroad agreement as what to do with business tax extenders.”

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DeBoer says the Roundtable will be continuing its drumbeat onthe Hill until Congress adjourns for this year. "Every day we aremeeting with members of Congress and staff people to reinforce ourlong standing message that the carried interest proposal is verybroad and applies to much more than hedge fund and private equitymanagers as it would be a dramatic change in partnership tax law,”he says.

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Erika Morphy

Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.