WASHINGTON, DC-The last the commercial real estate industry heard of the proposal to change the tax characterization of carried interest 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, still awaiting action during this lame duck session.
There is a chance that it could be revived and pushed past the finish line--especially as both Congress and President Obama are moving closer on an agreement on the larger tax issues that have grabbed the headlines in recent months.
If the tax characterization is changed, Real Estate Roundtable’s Jeff DeBoer tells GlobeSt.com, it won’t likely be through a formal or technical process such as the one that unfolded in the House earlier this year. “Probably what would happen is a less process-oriented agreement with congressional leaders and the White House will take place in which they will decide how to deal with bigger issues of individual tax rates and the alternative minimum tax and the estate tax. At this point they will also have some broad agreement as what to do with business tax extenders.”
DeBoer says the Roundtable will be continuing its drumbeat on the Hill until Congress adjourns for this year. "Every day we are meeting with members of Congress and staff people to reinforce our long standing message that the carried interest proposal is very broad and applies to much more than hedge fund and private equity managers as it would be a dramatic change in partnership tax law,” he says.
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