As previously reported, the MHI-NCC is working feverishly to prevent a tax increase on affordable housing in America.
Congress is currently considering a set of tax and benefit extensions which includes several controversial revenue generators. One such measure is to tax “carried interest” earned by real estate investors, venture capitalists and private equity fund managers. “Carried interest” represents the long term gains attributable to the managing sponsors of these entities. Such earnings are now taxed as capital gains, and Congress is proposing to tax those earnings as ordinary income.
Under its most recent proposal, Congress is considering 75 percent of carried-interest earnings would be treated as ordinary income for tax purposes, meaning it would be taxed at a higher rate. The remainder would be taxed as capital gains. The bill would provide transition relief until 2013. A revenue estimate released yesterday said the provision would raise $18.7 billion.
Real estate partnerships—and the millions of Americans who live in manufactured home land-lease communities and rely on our industry to provide them with safe, decent affordable housing—will be very adversely affected by such a change. This will be a tax on affordable housing.
MHI is part of a business coalition and other trade associations that has been active in opposing changing the current “carried interest” provision. The National Association of Counties and the US Conference of Mayors also have come out against this provision.
Last week, MHI sent out an action alert to MHI-NCC members and state associations asking them to contact their Congress members in opposing the “carried interest” measure.
MHI members with questions can contact Rae Ann Bevington at firstname.lastname@example.org.