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Changes to Taxation of Investment Management Income

This act modifies how income earned by individuals managing investment funds and similar entities is taxed. The goal is to ensure this income is treated as ordinary income rather than capital gains, which could affect the amount of taxes paid. These changes primarily impact professionals in the financial industry and asset management.
Key points
Income from investment management services will be taxed as ordinary income, not capital gains, potentially increasing tax burdens for some financial professionals.
New rules are introduced for valuing partnership interests received in exchange for services.
The penalty for underpayments related to avoiding these new provisions is increased to 40% of the underpayment.
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Expired
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Additional Information
Print number: 117_S_1598
Sponsor: Sen. Baldwin, Tammy [D-WI]
Process start date: 2021-05-12
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Summarized by: gemini-2.5-flash-preview-05-20
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Carried Interest Fairness Act of 2021

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 117_S_1598.

Which chamber initiated this legislation?

This legislation was initiated in the Senate.

When did the legislative process begin?

The process officially started on 2021-05-12.

What are the main provisions?

Key points include:

  • Income from investment management services will be taxed as ordinary income, not capital gains, potentially increasing tax burdens for some financial professionals.
  • New rules are introduced for valuing partnership interests received in exchange for services.
  • The penalty for underpayments related to avoiding these new provisions is increased to 40% of the underpayment.
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 Sen. Baldwin, Tammy [D-WI].

What is the latest detailed status?

The latest detailed status is: Introduced in Senate

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-29.

CATEGORIES

Taxes Economy