Promote Non-Discriminatory Tax Policy (Enter­prise Value and Carried Interest)

In prior Congresses, legislation regarding the taxation of “enterprise value” has been introduced to change the tax treatment on a sale of a business from a capital gains rate to the ordinary income rate. This change, however, would only apply when the stake in the business belongs to an investment adviser.

MFA remains actively opposed to discriminatory tax proposals that would unfairly punish investment advisors who build businesses.

Several proposals introduced in previous Congresses also have included a tax proposal that would tax a partner’s carried interest in a partnership (or LLC) as ordinary income.

MFA is opposed to the discriminatory approach to proposed changes in carried interest to the extent that measures introduced to date have addressed concerns regarding carried interest for financial firms while leaving in place the existing regime for similarly situated non-financial entities.

MFA urges policymakers to maintain the current tax treatment of the investment returns of advisers to private pools of capital and continues to encourage policymakers to support tax policies that do not create significant collateral effects.