A coalition of real estate groups is urging Congress to reject a possible increase in taxes that would subject carried interest in small to medium sized partnerships to ordinary income tax rates of up to 35% instead of as capital gains rates of 15%, as they are now.
Congress is considering such an increase as part of its efforts to reduce the federal deficit and come to terms on an increase in the national debt limit.
The Group, called Real Estate Coalition, said in a statement that such a tax increase would "would overturn more than 60 years of partnership tax law and would significantly curtail commercial real estate activities."
The group said projects involving brownfields, mixed-use or affordable and workforce housing components would be the hardest hit by the tex change because "developers use carried interest as the return for shouldering the tremendous risks and liabilities associated with these types of real estate projects, including environmental concerns, operational shortfalls, construction delays and loan guarantees."
The members of the coalition include the American Hotel & Lodging Association, American Resort Development Association, American Seniors Housing Association, Building Owners and Managers Association (BOMA) International, Institute of Real Estate Management, International Council of Shopping Centers, Mortgage Bankers Association, The Commercial Real Estate Development Association, National Apartment Association, National Leased Housing Association, National Multi Housing Council and The Real Estate Roundtable, among others.