A bill to amend the Internal Revenue Code of 1986 to revise the treatment of partnership interests received in connection with the performance of services, and for other purposes.

This legislation aims to modify the Internal Revenue Code of 1986 to change the tax treatment of partnership interests received by individuals who provide services to a business. Currently, certain investment managers and partners can benefit from lower tax rates on income derived from these interests, a practice often referred to as the carried interest loophole. The bill proposes to revise these rules, which would likely result in this type of income being taxed at higher ordinary income tax rates rather than lower capital gains rates. If enacted, this change would primarily affect high-income professionals in the private equity, hedge fund, and real estate industries. By reclassifying this compensation, the bill aims to ensure that income earned from performing services is taxed consistently with standard wage income. This could lead to increased federal tax revenue and a shift in how investment partnerships structure their compensation agreements for partners and service providers.