House and Senate negotiators appear to have resolved a major revenue-raiser for the tax extender legislation (HR 4213). It appears that final version of the measure will include the taxation of carried interest, which lawmakers estimate will generate $24.6 billion over 10 years. The House of Representatives previously approved this revenue raiser in December. He final version is likely to gradually increase the tax rate on carried interest from capital gains to ordinary income rates over time. House Ways & Means Chairman Sander Levin (D-Mich.) indicated that there would be no carve-outs for the real estate industry. A report published last year by the National Association of Homebuilders found that this proposal will have negative impacts on the real estate industry and in particular the multifamily housing sector (affordable and market rate), in particular impacting the developer’s share of the residual profit from a partnership.
The resolution of this revenue-raiser paves the way for the passage