Dear INVESTOR, CLIENT and ICSC Member,
ICSC has learned that the U.S. House of Representatives is likely to consider
a tax increase on real estate partnerships next week with the U.S. Senate
following the week of May 24th. If this legislation passes through the
House and Senate, we expect it to be signed into law before Memorial Day.
The carried interest proposal would increase the taxes on a general
partner's promote or sponsor's share from the current capital gains rate of
15% to the ordinary income rate of 35%. In addition to the tax rate increase,
one of the biggest concerns about the legislation is that gains from a
partnership would be re-characterized as ordinary income. As a result,
not only would the tax rate go to the 35% ordinary income rate (possibly
39.6% in 2011), but the income would also be treated as compensation and
subjected to employment-related taxes, such as Social Security and Medicare,
as well as additional state taxes. Furthermore, capital losses would no
longer be able to offset separate gains. It is critical that Congress
preserve the ability to offset and the current character of gains from
partnerships, otherwise the impact will be devastating to real estate
entrepreneurs.
Although the House has voted for this tax increase three times before, it is
important to contact to contact House Representatives again to make them
fully aware of all the ramifications associated with a vote that supports a
permanent carried interest tax increase to offset numerous temporary tax
incentives.
Based on intelligence we have received thus far, the Senate continues to be
the pressure point. There is no reported widespread agreement or consensus in
the Senate with the House approach. Unlike the House, the Senate has not held
a vote on this tax increase, and several Senators have expressed serious
concern about it. We know much of these reservations are the result of your
communications to your Senate offices. In short, keep it up. We need to
continue to stir the pot and most importantly, ask your Senators to
communicate their reservations to Senate Finance Chairman Max Baucus (D-MT),
who oversees the bill, so that he is aware of the
opposition.
Please click here to use the ICSC phone script and sample letter as a
resource when contacting your Congressional delegation. We encourage you to call your
Senators and Representative, as phone calls are more impactful.
However, you can also click here to send an email if
you are more comfortable with that option. The important thing is that your
elected officials hear from you.
The next two weeks are crucial. Thank you for your
continued action on this issue.
On behalf of,
Betsy Laird
Senior Vice President
Office of Global Public Policy
ICSC
ICSC has learned that the U.S. House of Representatives is likely to consider
a tax increase on real estate partnerships next week with the U.S. Senate
following the week of May 24th. If this legislation passes through the
House and Senate, we expect it to be signed into law before Memorial Day.
The carried interest proposal would increase the taxes on a general
partner's promote or sponsor's share from the current capital gains rate of
15% to the ordinary income rate of 35%. In addition to the tax rate increase,
one of the biggest concerns about the legislation is that gains from a
partnership would be re-characterized as ordinary income. As a result,
not only would the tax rate go to the 35% ordinary income rate (possibly
39.6% in 2011), but the income would also be treated as compensation and
subjected to employment-related taxes, such as Social Security and Medicare,
as well as additional state taxes. Furthermore, capital losses would no
longer be able to offset separate gains. It is critical that Congress
preserve the ability to offset and the current character of gains from
partnerships, otherwise the impact will be devastating to real estate
entrepreneurs.
Although the House has voted for this tax increase three times before, it is
important to contact to contact House Representatives again to make them
fully aware of all the ramifications associated with a vote that supports a
permanent carried interest tax increase to offset numerous temporary tax
incentives.
Based on intelligence we have received thus far, the Senate continues to be
the pressure point. There is no reported widespread agreement or consensus in
the Senate with the House approach. Unlike the House, the Senate has not held
a vote on this tax increase, and several Senators have expressed serious
concern about it. We know much of these reservations are the result of your
communications to your Senate offices. In short, keep it up. We need to
continue to stir the pot and most importantly, ask your Senators to
communicate their reservations to Senate Finance Chairman Max Baucus (D-MT),
who oversees the bill, so that he is aware of the
opposition.
Please click here to use the ICSC phone script and sample letter as a
resource when contacting your Congressional delegation. We encourage you to call your
Senators and Representative, as phone calls are more impactful.
However, you can also click here to send an email if
you are more comfortable with that option. The important thing is that your
elected officials hear from you.
The next two weeks are crucial. Thank you for your
continued action on this issue.
On behalf of,
Betsy Laird
Senior Vice President
Office of Global Public Policy
ICSC
Sincerely,
Brad Bailey
Marcus & Millichap
Real Estate Investment Services
Real Estate Investment Services
Associate Vice
President, Investment
President, Investment
Director, National
Retail Group
Retail Group
*Serving commercial real
estate investors inTexas
since 2002
estate investors in
since 2002
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