To Hold Or Not To Hold: S Corps And The Carried Interest Rule
By Elizabeth McGinley and Steven Lorch ( March 27, 2018, 4:24 PM EDT) -- On March 1, 2018, the U.S. Treasury Department and the IRS issued an advanced version of Notice 2018-18, stating that forthcoming Treasury regulations would provide that carried interests held by Subchapter S corporations are subject to the new three-year holding period for long-term capital gain treatment. The notice followed a statement by Treasury Secretary Steve Mnuchin in testimony before the Senate Finance Committee clarifying that Congress did not intend to exclude carried interests held by S corporations from the scope of the new holding period and promising formal guidance to document such position. The notice states that the new regulations will have a retroactive effective date, applicable to all tax years beginning after Dec. 31, 2017....
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