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Charles Temkin

'This industry could become unattractive to people who want to work in it.'

By John Salustri | Updated on August 17, 2007

THE CARRIED INTEREST THREAT

A bill currently being floated by Rep. Charles Rangel (D-NY) and Sandy Levin (D-MI) is likely to crank up the tax burden on the real estate industry. According to Commentator Charles Temkin, director at Deloitte Tax LLP, so-called carried interest, as the legislation is dubbed, is a misnomer for a tax hike that will affect far more than private-equity circles. And yet 25% of respondents to last week’s Feedback Poll said the legislation won’t apply to real estate at all; 7% think it will impact only large deals; and 20% think only private equity will feel the pinch. Those who believe it will sweep through all real estate partnerships weighed in at 44%. Here’s Temkin’s take:

“Some people have heard there’s legislation but haven’t focused on it as much as they might because it’s always referred to as ‘carried interest,’ and that’s a phrase not typically used in real estate. I think the term comes from the oil or gas industry, but I’ve heard it only in connection with private-equity deals. But the concept has been in every real estate deal I’ve ever worked on.

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