Carried interest is the often vilified—and more often misunderstood—tax provision that treats gains from a real estate investment general partner as capital gains rather than ordinary income, allowing them to be taxed at a lower rate. The real estate industry uses carried interest to spur development. Taxing carried interest at a higher rate would mean general partners would demand a higher flat fee from their investors, often institutional investors, and fewer deals would get done. BOMA International will continue to follow this issue closely and ensure that the concerns of the commercial real estate industry are heard in Congress.
For more information on carried interest, visit BOMA’s Industry Issues.