A Federal Proposal Would Change Tax Treatment From Capital Gains To Ordinary Income

March 2, 2010 at 3:49 pm

NAIOP members may be interested and impacted by proposed changes in Congress which would change the tax treatment of partnership carried interest (also known as “promoted interest” or “promote”) from capital gains to ordinary income. If signed into law, this would result in a tax increase from the current capital gains tax rate of 15 percent to ordinary income rates as high as 35 percent on many real estate development partnerships and limited liability companies (LLCs) that utilize carried interest.

NAIOP Corporate has been working hard to exempt commercial real estate development from this provision.  This link will take you to NAIOP’s website and provide you with the description of the issue, NAIOP’s position, talking points, links to the legislation, and other resources.
Click here  for a resolution passed just last week on February 16th by the City of Burnsville in support of NAIOP’s position on carried interest.  

Why, you might ask, is the City of Burnsville interested in this issue?  Burnsville Mayor Elizabeth Kautz took over as the head of the US Conference of Mayors in January.  Last fall, we arranged a meeting with Mayor Kautz, NAIOP Minnesota members and national lobbyists from commercial real estate organizations, including NAIOP. The ultimate goal of the meeting was to get the US Conference of Mayors to support the commercial real estate position on carried interest.  Through the magnificent work of Mayor Kautz, NAIOP lobbyists and others, that was accomplished and in short order.  As of January 21st, the US Conference of Mayors is on record in support of our position, citing the negative impact on economic development in communities across the country. 
Mayor Kautz is suggesting that people who are interested and impacted by the proposed change in tax treatment of carried interest to urge other cities in Minnesota to pass resolutions such as the City of Burnsville did.
Click here  for a list of Minnesota’s congressional delegation with their contact information. If you have an opinion about this issue, please voice your concerns to them.  As Larry Pobuda, Stewart Lawrence Group, said, “it is important that they hear from different voices from different sources.”

Entry filed under: Public Policy | Government Affairs.

A conversation with 2010 President Doug Fulton Developing Leaders Discuss Minnesota’s Legislative Agenda with David Olson

For more information about NAIOP Minnesota, visit www.NAIOPMN.org.

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