December 9, 2009
House Moving Quickly on “Tax Carried Interests as Ordinary Income” Bill
Here is an excerpt from a Gibson Dunn memo:
The Tax Extenders Act would tax income and gains associated with “carried interests” as ordinary income and would expand reporting obligations and penalties to curb foreign tax evasion and fraud. Although these proposals have been proposed previously in separate bills, they are being incorporated into the Tax Extenders Act as a means of financing the $31 billion price tag for extending expiring tax provisions through 2010.
Analysts note that the bill is expected to pass the House easily, but its future in the Senate is unclear. While it is likely that the Senate Finance Committee will take up an extenders bill, it may not do so until next year – after the Senate finishes its work on health care legislation – and it may well include a different set of offsets. It is possible that Congress could delay resolution of the bill, because most of the provisions can be extended retroactively in 2010.