Carried Interest
On Friday, May 28 the US House passed H.R. 4213, "The American Jobs and Closing Tax Loopholes Act of 2010." This legislation will raise taxes on Carried Interest by 157% over the next three years. The start date of the tax change in the House bill is Jan 1, 2011, thus exempting income from the 2010 tax year.
The new legislation would tax Carried Interest as half Ordinary Income and half long-term Capital Gains in 2011 and 2012 and thereafter tax it at 3/4 Ordinary Income and 1/4 Capital Gains. That would raise the effective tax rate to more than 38%.
This legislation will now be considered by the US Senate. Below are several documents designed to provide additional information on this issue.
Example Letter to Senator Wyden (OR)
Example Letter to Senator Kerry (MA)
Example Letter to Senator Nelson (FL)
Example Letter to Senator Schumer (NY)
Analysis of the Impact of Increasing Carried Interest Tax Rates on the U.S. Economy
America Jobs Summary - May 28, 2010
What They're Saying on Carried Interest
NAIC Opposes Increases in Taxes on Carried Interest