Plans for Carried Interest Worry Industry

(Read more on the debt and equity markets.)

WASHINGTON, DC-New rumblings from Congress to push for a change in the way certain private equity transactions are taxed–specifically changing the tax characterization of Carried Interest–is beginning to alarm the real estate industry. Previously these changes were seen as less likely to actually become law, if only because of the threat of presidential veto. If by some reason these bills were to become law, they were perceived–accurately or not–as being limited to private equity deals.

It has been widely reported that New York Democrat Charles Schumer is preparing new legislation that would raise the tax rate in all partnerships, not just private equity. Another new congressional proposal is to link this issue to a revamp of the widely-hated AMT (alterative minimum tax) schedule. Vetoing AMT reform, critics of the proposed law acknowledged, will be very difficult. Sen Schumer’s office did not return calls from GlobeSt.com by press time.