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HR 1091119th CongressIntroduced
Carried Interest Fairness Act of 2025
Introduced: Oct 29, 2025
Standard Summary
Comprehensive overview in 1-2 paragraphs
The Carried Interest Fairness Act of 2025 recharacterizes carried interest and investment management service income as ordinary income rather than capital gains for tax purposes.
Key Points
- 1Treats net capital gains from investment services partnership interests as ordinary income
- 2Applies to partners providing investment management services to partnerships
- 3Includes anti-abuse rules and exceptions for qualified capital interests
- 4Requires gain recognition on dispositions of investment services partnership interests
- 5Imposes 40% penalty (instead of 20%) for underpayments related to investment management services
- 6Excludes domestic C corporations from the new rules
Impact Areas
Private equity and hedge fund managersInvestment partnerships and carried interest compensationFederal tax revenue and tax policyWall Street compensation practicesSocial Security payroll tax calculations
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