VICTORY! Tax Bill to be Signed into Law – No Carried Interest Increase

[This is a key announcement from the International Council of Shopping Centers (ICSC) on a topic that has been frequently written about on this website.]

ICSC is pleased to report that the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (H.R. 4853) is on its way to the White House for signing and does not include the carried tax increase on real estate partnerships. This achievement is a direct result of the tireless grassroots efforts of ICSC membership in successfully lobbying Congress to oppose the largest tax increase on real estate since 1986.

Last night, by a 277-148 vote, the House passed the Senate version of the tax bill, an $858 billion package that combines a two-year extension of the Bush tax cuts for all taxpayers, a seamless extension of a package of expired/expiring individual and business tax provisions – including the15-year-depreciation of restaurant, retail and leasehold improvements, brownfield remediation and New Markets tax credits.
The bill also includes an estate tax plan with a $5 million per-individual exemption and 35% rate, 100% expensing for capital investments beginning Sept. 8, 2010 through 2011, a 2% payroll tax reduction for 2011, and a 13-month extension of unemployment benefits.
Build America Bonds and an extension of the deferral provisions for income associated with the Cancellation of Debt (COD) were not included in the package. In addition, a repeal of the 1099 reporting provisions (which were included in the health care reform law) was omitted from the legislation that passed last night.

Key elements of the tax package include:

  • All of the 2001 Bush tax rates are extended through 2012 (including extension of the individual income tax brackets, 15% capital gains and dividend rates, and the child tax credit);
  • The Alternative Minimum Tax (AMT) patch will be extended for two years, 2010 and 2011;
  • Various tax provisions that expired in 2009 or are expiring in 2010 are extended through the end of 2011;
  • Companies will be given the opportunity to write off new equipment at a 100% rate;
  • Instead of extending the “Making Work Pay” or “Hire Act” credits, workers and self-employed individuals will have a reduction in their share of the employee’s payroll tax obligation of 2% in 2011, reducing the rate from 6.2% to 4.2%;
  • Unemployment benefits will be extended for 13 months, through the end of 2011;
  • The estate tax will be set at a 35% rate with a $5 million exemption through 2010, with an election for 2009 estates.

Note: This is content originally posted by ICSC – visit their site at