United States

Carried interest provision anticipated to be added to House tax bill


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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