United States

Carried interest provision anticipated to be added to House tax bill

TAX ALERT  | 

Amendments to the House tax bill are said to be expected today to address the treatment of carried interest. Reports are that a two-year holding period for long-term capital gains will be proposed, however, it is currently unclear how the amendment will distinguish normal capital gains, with a normal one-year holding period, from those of carried interest capital gains.  

Although a two-year holding period will not have much of a bite for many carried interest holders, identifying exactly what a “carried interest” is, has been at the heart of the debate over whether “carried interest” is a normal feature of current law or an “abuse” or “loophole.”  Thus, the provision will be significant for its approach, as much as for its actual effect.

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