Identifying obscure but potentially costly tax issues is a skill. Solving them in the context of our client’s goals is an art, and one that Paul, Weiss practices at the highest level. Working closely with the Corporate and Restructuring Departments, our tax lawyers help clients solve problems, avoid pitfalls and uncover hidden value in all types of transactions.
Baucus and Levin Release Revised Carried Interest Legislation
May 21, 2010
Summary: On Thursday, May 20, 2010, Senate Finance Committee Chair Max Baucus and Acting House Ways and Means Committee Chair Sander M. Levin jointly released proposed statutory language for the American Jobs and Closing Tax Loopholes Act of 2010, which includes proposed changes to the taxation of carried interest. Among other things, the proposed legislation provides for a "blended" rate of tax on carried interest and similar arrangements. For individual taxpayers, once it has been fully phased in by 2013, the proposed legislation would treat 75% of carried interest as ordinary income and the remaining 25% as it is treated under current law (i.e., based on the underlying income of the fund in question). Until 2013, the percentages would be 50% and 50%.