Page 14 - Tax Reforms - Businesses

Limitations on Carried Interest (6/9)

Limitations

The law extended the holding period
with respect to certain carried
interests (i.e. applicable partnership

interests) to three years.
Carried interests are ownership
interests in a partnership that share in
the partnership’s net profits.

Carried interests often are issued to
investment managers in connection
with the investment manager’s
services. These interests often result
in the holder receiving capital gains
which are taxed at a lower rate, rather

than ordinary income.

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