The issue of carried interest has once again become a popular talking point among politicians, but this time calls for change may have some legs. Changes to the rules surrounding it have been proposed by both Congress and the IRS.
A bill, the Carried Interest Fairness Act, has been introduced in Congress; it seeks to tax carried interest at ordinary income tax rates rather than the lower capital gains rates. The measure is estimated to provide a revenue gain of $15.6B over the next 10 years.
Meanwhile, the public comment period for a proposed rule change from the IRS comes to a close on Oct. 21. The proposed rule would ban companies from converting management fees into capital contributions. [GS]
