Trump Tax Plan Offers No Carried Interest Specifics
President Trump’s tax reform plan has garnered a great deal of interest since its release, especially for its individual reform proposals and 15 percent business tax rate. However, of particular interest to the real estate industry is the President’s position on carried interest. Over the past several years, debate has raged in Congress about the treatment of carried interest in the tax code, with many demonizing it as a loophole. Currently taxed as a capital gain, critics have argued that it should be taxed at the much higher ordinary income rate. The rationale used by advocates of change has been that the current treatment of carried interest unfairly benefits Wall Street hedge fund managers. As we know however, a change in this tax would directly impact real estate developers, with the effect of dampening investment in residential and commercial projects.
The one page tax reform document issued by President Trump – entitled the “2017 Tax Reform for Economic Growth and American Jobs” – does not specifically mention carried interest. There is, however, a nebulous bullet point in the business reform section that states “Eliminate tax breaks for special interests.” As a presidential candidate, Trump’s economic plan proposed taxing carried interest at the ordinary income rate. Interestingly, the tax plan proposed by the House Republicans last June also did not specifically address carried interest. Stay tuned …
Federal Civil Rights Act/Fair Housing Act Amendment Proposed
Legislation has been introduced in both the U.S. Senate and House of Representatives which would add sexual orientation and gender identity to the list of protected classes currently identified in the Civil Rights Act and Fair Housing Act. The legislation, called the Equality Act of 2017, would explicitly ban discrimination against LGBTQ individuals in housing, employment, credit, public education, and other areas covered by anti-discrimination laws.