Real Estate Coalition Strongly Opposes Proposed Changes to Carried Interest Law
August 3, 2022
The Roundtable and 14 other national real estate organizations wrote to all members of Congress in strong opposition to proposed changes affecting carried interest that are included in the Inflation Reduction Act of 2022, the broad $790 billion reconciliation bill under consideration in the Senate.
- “The carried interest proposal would slow housing production, discourage the capital needed to reimagine buildings to meet post-pandemic business needs, hamper job creation and create an additional unknown in an already confusing economic environment,” according to the coalition letter.
- The letter explains how the current reconciliation proposal would unintentionally extend the holding period requirement for carried interest well beyond the 3 or 5 years—and impact other types of carried interest income common in the construction and improvement of housing and other real estate.
- Additionally, the legislation would apply retroactively to partnership agreements executed years earlier. This change could alter the basic and mutually agreed economics of an original deal between parties, and undermine the predictability of the tax system.
- The real estate coalition letter concluded, “Now is not the time to impose a tax increase on the countless Americans who use partnerships to develop, own, and operate housing and other commercial real estate. We urge you to preserve current tax law as it relates to carried interest.”
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