Taxes on Carried Interest

[Bryan Hancock]

What was the recent proposal on taxation for carried interest in partnerships? I am trying to understand the logic in taxing these interests and what everyone was in a tizzy about.

[Account Closed]

The argument is that this is essentially ordinary income but that it is taxed at capital gains rates. Part of the controversy is the magnitude of some of these payments.

This link does a fair job of explaining the concept.

http://en.wikipedia.org/wiki/Carried_interest