A new deal between senators Chuck Schumer (D-NY) and Joe Manchin (D-WV) is close to offering passage of, among other things, an end to the carried interest tax break as it's been known for years.

In the proposed "Inflation Reduction Act of 2022," the two finally came to an agreement.  Manchin has been the main spoiler of Biden administration policy ambitions and key to getting a big piece of legislation passed. Included in the bill is a section called "Closing the Carried Interest Loophole."

The section would require gains of a partnership interest to be held for a minimum of five years to receive treatment as a long-term capital gain rather than the ordinary income rates that apply to short-term capital gains. Currently, the holding period is three years.