Dec. 22, 2009
House passes
carried (profits) interest legislation
On Dec. 9, 2009, the U.S. House of
Representatives passed legislation containing a carried interest
provision as a revenue offset to a number of expiring tax
provisions, including the research credit. The carried interest
provision generally would cause income attributable to carried (or
profits) interests to be taxable at ordinary income rates (as
opposed to capital gains rates) and subject to self-employment taxes
in the case of income reported by an individual.
The legislation will now move to the
Senate for consideration. Although the carried interest provision is
likely to face strong opposition in the Senate, there is bipartisan
support for the extension of the expiring provisions, and it is not
clear whether an alternative revenue offset is available. The
legislation would be effective for dispositions of partnership
interests and partnership distributions occurring after Dec. 31,
2009 — regardless of when the interest was originally granted.
Learn more.
For more information
Cynthia Keveney
Financial
Services
Grant Thornton LLP
T 212.624.5495
E Cynthia.Keveney@gt.com
Visit
www.GrantThornton.com.
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