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ARTICLE · 21 NOVEMBER 2024

Shrinking Carried Interest Loophole Under Attack Again

Hogan Lovells Cadwalader
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On October 10, Representative Matt Cartwright (D-PA) introduced the Bill Pascrell Ending Tax Giveaway Act with the goal of "closing the controversial carried interest loophole."

United StatesTax
Hogan Lovells Cadwalader
Hogan Lovells Cadwalader
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On October 10, Representative Matt Cartwright (D-PA) introduced the Bill Pascrell Ending Tax Giveaway Act with the goal of "closing the controversial carried interest loophole."

The "carried interest loophole," which allows investment fund managers to benefit from preferential long-term capital gains rates on what is effectively compensation for services, has been targeted by some members of Congress for years now. The Tax Cuts and Jobs Act ("TCJA"), enacted in the first Trump Administration, whittled away at the carried interest preference by extending the previous one year asset holding period to three years. Final regulations implementing the three year holding period were issued in January 2021 (which we discussed here).

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