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1972 – 50 years of service to the commercial industrial retail real estate industry – 2022.


July 8, 2011

Our friends at ICSC have alerted us that the Carried Interest tax increase on commercial real estate partnerships and LLCs is being seriously considered as part of the agreement to raise the debt ceiling.

Discussions are expected to take place over the weekend. Please contact your Senators and Congressman on Friday, July 8, to let them know that this tax increase will be devastating to commercial real estate partnerships and LLCs.

While much of the discussion has focused on closing a perceived tax loophole on hedge funds and private equity firms, many members of Congress fail to realize that the commercial real estate industry will be most impacted by the proposal. If a carried interest tax increase is enacted, hedge and private equity fund managers will reprice, restructure or move overseas; all tactics that real estate partnerships are unable to utilize. In other words, a change in the taxation of carried interest will barely impact Wall Street, but it will cripple Main Street.

Last year, the commercial real estate industry made a tremendous impact by reaching out to their Members of Congress and educating them on the harm that this tax increase will have on the real estate industry and local communities. ICSC is asking you to ramp up the pressure again by calling 202-224-3121 and asking to speak to your Congressman and Senators or sending their offices an email by clicking here. Placing a phone call will be a more timely way to reach your Members of Congress. Please remember to reference the following points:

– A tax increase on carried interest will have serious unintended consequences to real estate partnerships and local communities.

– With the commercial real estate industry under serious strain due to current economic conditions, raising this carried interest tax on real estate will not only threaten economic development projects, but it will also jeopardize the related jobs that those projects create.

– This tax increase will hit small to medium-size developers the hardest. These developers are already struggling with the current credit crisis, and this proposal will further limit available capital in the real estate market.

– While the original target was private equity and hedge fund managers, this proposal will disproportionately impact real estate partnerships, which represent nearly half of all partnership tax returns.

Thank you for taking time to contact your Members of Congress on this critical issue.

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