WASHINGTON, DC--(Marketwire - Jul 19, 2011) - The undersigned real estate organizations urge Congress to reject an increase in taxes on partnership carried interest that would encumber job creation and halt economic recovery. In an attempt to help close the budget deficit, lawmakers are considering treating carried interest as ordinary income (taxed at up to 35 percent) rather than as capital gain (subject to a top rate of 15 percent).
Such an increase could derail a real estate recovery by disproportionately impacting small to medium sized real estate partnerships that rely on carried interest to make up for the substantial risks and liabilities associated with long-term real estate ownership and development.
The proposed tax increase on carried interest would overturn more than 60 years of partnership tax law and would significantly curtail commercial real estate activities. Nearly half of all investment partnerships in America are real estate partnerships, which are key drivers of job creation and economic development in communities across the country.
When Congress considered raising the tax rate on carried interest last summer, both the U.S. Conference of Mayors and the National Association of Counties passed resolutions urging Congress to maintain the current law as it relates to real estate partnerships because of its negative impact on state and local taxes.
An increase in the carried interest tax rate will result in:
Real Estate Coalition:
American Hotel & Lodging Association, American Resort Development Association, American Seniors Housing Association, Building Owners and Managers Association (BOMA) International. CCIM Institute, CRE Finance Council, Institute of Real Estate Management, International Council of Shopping Centers, Mortgage Bankers Association, NAIOP - The Commercial Real Estate Development Association, National Apartment Association, National Leased Housing Association, National Multi Housing Council and The Real Estate Roundtable.