H.R. 1091: Carried Interest Fairness Act of 2025

119th Congress · introduced 2025-02-06 · Taxation · Latest: Referred to the House Committee on Ways and Means.

federal

Official title

Carried Interest Fairness Act of 2025

Plain summary

Carried Interest Fairness Act of 2025 This bill taxes income from carried interest at ordinary income tax rates and makes other changes related to carried interest. (Some exceptions apply.) As background, a general partner in a private equity firm or hedge fund (typically structured as a partnership) generally receives a share of the profits from the assets managed by the general partner (known as carried interest). Under current law, carried interest is characterized (for federal tax purposes) as an interest in a partnership’s capital and, thus, taxed at capital gains tax rates (which may be lower than the applicable ordinary income tax rates). Under the bill, net capital gain and loss attributable to carried interest is recharacterized as ordinary income and loss and, thus, taxed at ordinary income tax rates. (Some exceptions apply.) The bill also treats as ordinary the money (or fair market value of property) received by a partner in a sale or exchange of carried interest. (Thus, the bill extends what is known as the hot asset rule to include carried interest.) Further, the bill deems distributions of carried interest by a partnership in exchange for interest in other partnership property a sale or exchange of such property and, thus, requires the partner to recognize ordinary gain on the distributed carried interest. Finally, the bill imposes self-employment taxes on carried interest income.

Congressional Research Service summary (Introduced in House), quoted unchanged (nonpartisan). Read the source.

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Official text

Carried Interest Fairness Act of 2025

Source: Congressional Research Service summary (Introduced in House)

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Officials and money

Sponsor: Rep. Perez, Marie Gluesenkamp [D-WA-3] · 2 cosponsors

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Words on this page, explained (2)

Bill: A proposed law. It becomes law only if it passes the legislature and is signed by the president or governor (or a veto is overridden).
Capital gains: The profit from selling something you own, such as stock or real estate, for more than you paid. A capital gains tax is a tax on that profit.

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Sources

Congressional Research Service summary (Introduced in House)
Congress.gov
Data: GovInfo BILLSTATUS bulk data (Library of Congress), BILLSTATUS-119hr1091.xml <https://www.govinfo.gov/bulkdata/BILLSTATUS/119/hr>

Record fed-us-cong119-hr1091 · catalog fed-us-congress-bills-cong119 · updated 2026-11-03 by psicol fed-bills