With Congress only now coming back in the week of September 10, 2012 from its traditional August recess, there is not too much to report for September 2012. Consequently, with the 2012 Presidential election almost here, it seems appropriate to compare and contrast in general terms the tax policies being advanced by President Obama and former Governor Romney. It is likely that the policies being advanced now by the winner of the November 6, 2012 election will impact not only 2013, but also 2014 and beyond.
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¹General partners in private equity and hedge funds are typically compensated for their services rendered to the fund by paying them a percentage of the fund's earnings (as a so-called "carried interest"), which typically consists largely, if not entirely, of capital gains realized by the partnership. Accordingly, under current law, to the extent the partnership's income consists of capital gains, any income recognized by the partner because of the partner's receipt of such "carried interests" is therefore taxed as capital gains, rather than as ordinary income.