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Changes to Taxation of Partnership Interests for Services Rendered

This act aims to change how certain income from partnership interests, linked to services performed, is taxed. This means that some profits previously treated as capital gains (often taxed at a lower rate) will now be taxed as ordinary income, potentially increasing tax burdens for individuals operating in specific industries.
Key points
Profits from certain partnership interests, received for services, will be treated as ordinary income instead of capital gains.
A "recharacterization account" mechanism is introduced to track amounts subject to the new tax rules.
The new rules apply to industries such as capital raising, investing, and business development.
The act takes effect for tax years beginning after December 31, 2021.
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Expired
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Additional Information
Print number: 117_HR_3903
Sponsor: Rep. Grothman, Glenn [R-WI-6]
Process start date: 2021-06-15
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Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Tax Fairness Act of 2021

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 117_HR_3903.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2021-06-15.

What are the main provisions?

Key points include:

  • Profits from certain partnership interests, received for services, will be treated as ordinary income instead of capital gains.
  • A "recharacterization account" mechanism is introduced to track amounts subject to the new tax rules.
  • The new rules apply to industries such as capital raising, investing, and business development.
  • The act takes effect for tax years beginning after December 31, 2021.
What is the specific legal status?

The current status is Expired.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Grothman, Glenn [R-WI-6].

What is the latest detailed status?

The latest detailed status is: Referred to the House Committee on Ways and Means.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-28.

CATEGORIES

Taxes Economy