Copying and distributing are prohibited without permission of the publisher

Debate still continues on US carried interest

28 December 2010

Richard Zarin and William Zimmerman of Morgan Lewis & Bockius investigate why the US Congress is having such difficulty passing carried interest legislation.

Since 2007 the US Congress has considered legislation numerous times that would subject investment fund managers to increased US federal income taxes on the share of investment partnership profits they are allocated in return for investment advisory services provided to such partnerships (carried interest). Why hasn't some form of carried interest legislation been passed to date? We believe the answer to this question is quite simple: The line drawing necessary to differentiate (and impose additional tax on) income attributable to investment management services provided by partners to US partnerships, without changing the favoured tax treatment of true equity investments in such partnerships, is just too difficult in light of the flexibility provided in US partnership tax rules, and in the current US political environment.

While there are a number of competing policy factors at play, we believe that two of such factors are the most significant.

The most compelling argument...



This article is locked content, available to current subscribers or trialists.

  • Current subscribers or trialists - Please log in to view this article in full.
  • New users - Please take a free 7 day trial.
  • Expired subscribers or trialists - Please subscribe to gain immediate full access.

If you think you've received this message in error, please contact your account manager, Nick Burroughs:
Email: nburroughs@euromoneyplc.com, Tel: +44 (0)207 779 8379

Subscribe now

Subscribe today to gain full access to International Tax Review.

Subscribe

Free trial

Take a free trial now and gain 7 days of full access to International Tax Review.

Free trial





International Tax Review Profile

Japan and Panama signed a #TIEA on August 25.

Aug 29 2016 08:34 ·  reply ·  retweet ·  favourite
International Tax Review Profile

Will the State Aid ruling on Apple cause tension between the US Treasury & Brussels at a precarious time for the EU?

Aug 29 2016 08:31 ·  reply ·  retweet ·  favourite
International Tax Review Profile

RT @TPWeek: FT report that Apple face multibillion tax bill in EU State Aid ruling. https://t.co/I54GvcWWQf

Aug 29 2016 07:15 ·  reply ·  retweet ·  favourite
International Tax Review Profile

RT @OECDtax: #Andorra #SaintKittsandNevis & #Senegal also further strengthen intl #tax co-operation today https://t.co/sjFP29nEQM https://t…

Aug 26 2016 08:47 ·  reply ·  retweet ·  favourite
International Tax Review Profile

Singapore and Ethiopia have signed a DTA today. Find the DTA here: https://t.co/GQzVR2tlLH

Aug 24 2016 06:16 ·  reply ·  retweet ·  favourite
International Correspondents