FY2023 budget would renew some partnership proposals and add new ones

Multidisciplinary professional services organization

2 minute read 21 Apr 2022

Those involved with partnerships will want to monitor these proposals.

The Biden Administration's FY2023 budget and Treasury Greenbook propose certain changes to the rules affecting partners and partnerships, such as limiting basis shifting between related partners and taxing carried interest as ordinary income. Other proposed changes include:

Amending the centralized partnership audit regime to allow for refunds
Eliminating tax deferral for like-kind exchanges above a certain threshold
Taxing IRC Section 1250 property gain as ordinary income
Eliminating the exemption for fossil-fuel publicly traded partnerships (PTPs)

Read the full alert

Summary

Private equity, private capital and other alternative asset management funds and their professionals could face increased administrative burdens and complexities if they are required to contend with two different carry taxation regimes applying to the same partnership.