|
Carried Interest Provision in AMT Bill Would Harm Housing
While legislation approved by the House last week would provide temporary relief from the Alternative Minimum Tax (AMT), NAHB opposes the measure because a plan to tax "carried interest" to pay for the bill would impose a multi-billion dollar tax increase on real estate at a time when the industry is already reeling from a major cyclical downswing.
While sharing the goals embodied in H.R. 6275, the Alternative Minimum Tax Relief Act of 2008, to halt the reach of the AMT for another year, NAHB noted that the carried interest proposal to offset the cost of this relief would result in higher prices for multifamily housing, less job creation and lower community development, especially in underserved areas. NAHB sent this message to lawmakers in a letter delivered before they voted on the bill.
Under present law, capital gain income generated by carried interest in a partnership is subject to a tax rate of 15%. Under the House bill, which passed by a vote of 233 to 189, this carried interest would be characterized as ordinary income subject to tax rates up to 35%.
While the Senate also supports reining in the AMT, the chamber in December rejected a similar House plan to tie AMT relief to increasing the tax on carried interest.
If the Senate considers AMT relief later in the year, NAHB will work aggressively to oppose any efforts to include the carried interest proposal because of its damaging impact on real estate development.
To read the House bill, click here and type H.R. 6275 in the box in the center of the page.
For more information, e-mail Greg Brown at NAHB at 800-368-5242 x8421.
|
