Congress Extends Bush Tax-Cuts
December 18, 2010Legislative Actions
After a prolonged and highly publicized debate between Democrats and Republicans, on Friday December 17th the President signed The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The law is colloquially known as the Bush Tax-Cuts Extender. Needless to say, the passage of this law was eagerly anticipated by both limited partners and managers of all sorts of funds. The two key provisions that impact funds and their partners are the 2 year extension of the 15% rate for qualified dividends and the 15% rate for long term capital gains. This law, in retrospect, makes a lot of the yearend planning tailored to trigger built-in gains premature. Aside from the pertinent provisions included in the law, it is notable that Senator Levin's "carried interest" proposal did not end up in the final version of the bill. Thus, this major issue continues to be in limbo.