Federal Legislation Targets Carried Interest

May 13, 2010 at 12:48 pm

Senators are currently considering federal legislation that would more than double the taxes on carried interest received by general partners in real estate partnerships. Carried interest would no longer be taxed as capital gains at 15 percent, but as ordinary income at rates as high as 35 percent.

The proposed change to the tax characterization of carried interest will be a significant drag on commercial real estate development if it goes forward, says Larry Pobuda, partner at the Minnesota-based Stewart Lawrence Group and NAIOP Corporate Chairman. “One of the core principles of commercial real estate industry is its entrepreneurialism and willingness to take risks,” he says. “Changing carried interest would limit the rewards for such risk-taking”.

Watch an interview with Larry Pobuda on REIT.com.

Entry filed under: Featured Articles, Public Policy | Government Affairs.

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