Bill Sponsor
Senate Bill 1598
117th Congress(2021-2022)
Carried Interest Fairness Act of 2021
Introduced
Introduced
Introduced in Senate on May 12, 2021
Overview
Text
Introduced
May 12, 2021
Latest Action
May 12, 2021
Origin Chamber
Senate
Type
Bill
Bill
The primary form of legislative measure used to propose law. Depending on the chamber of origin, bills begin with a designation of either H.R. or S. Joint resolution is another form of legislative measure used to propose law.
Bill Number
1598
Congress
117
Policy Area
Taxation
Taxation
Primary focus of measure is all aspects of income, excise, property, inheritance, and employment taxes; tax administration and collection. Measures concerning state and local finance may fall under Economics and Public Finance policy area.
Sponsorship by Party
Democrat
Wisconsin
Democrat
Massachusetts
Democrat
Massachusetts
Democrat
Minnesota
Democrat
New Jersey
Democrat
Rhode Island
Democrat
Rhode Island
Democrat
Virginia
Democrat
West Virginia
Senate Votes (0)
House Votes (0)
No Senate votes have been held for this bill.
Summary

Carried Interest Fairness Act of 2021

This bill modifies the tax treatment of carried interest, which is compensation that is typically received by a partner of a private equity or hedge fund and is based on a share of the fund's profits. (Under current law, carried interest is taxed as investment income rather than at ordinary income tax rates.)

This bill includes provisions that

  • set forth a special rule for the inclusion in gross income of partnership interests transferred in connection with the performance of services,
  • treat as ordinary income the net capital gain with respect to an investment services partnership interest except to the extent such gain is attributable to a partner's qualified capital interest,
  • exempt income from investment services partnership interests from treatment as qualifying income of a publicly traded partnership,
  • exempt certain family partnerships from the application of this bill,
  • increase the penalty for underpayments of tax resulting from failure to treat income from an investment services partnership interest as ordinary income, and
  • include income and loss from an investment services partnership interest for purposes of determining net earnings from self-employment and applicable self-employment taxes.

The bill defines investment services partnership interest as any interest in a partnership held by a person who provides services to a partnership by (1) advising the partnership about investing in, purchasing, or selling specified assets; (2) managing, acquiring, or disposing of specified assets; or (3) arranging financing with respect to acquiring specified assets.

Text (1)
Actions (2)
05/12/2021
Read twice and referred to the Committee on Finance.
05/12/2021
Introduced in Senate
Public Record
Record Updated
Jan 11, 2023 1:50:15 PM