Carried Interest Fairness Act of 2025: Tax Code Amendments
This Act amends the Internal Revenue Code of 1986 to modify the tax treatment of investment services partnership interests (carried interest). Net capital gains related to such interests will be treated as ordinary income rather than capital gains. Additionally, this income will be taken into account when determining net earnings from self-employment for social security tax purposes.
Key points
Net capital gains from investment services partnership interests will be recharacterized as ordinary income.
Income and losses from these interests will be included in the determination of net earnings from self-employment.
A 40% penalty is established for underpayments attributable to the avoidance of these new investment management service rules.
Status:
Introduced
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