Bill > HR9956

This bill, the Bill Pascrell Ending Tax Giveaway Act, amends the Internal Revenue Code to provide for the proper tax treatment of personal service income earned in pass-through entities. Specifically, it: 1. Modifies the rules for electing to include partnership interests received in connection with the performance of services in income in the year of transfer, requiring the fair market value of the interest to be determined based on the amount the partner would receive if the partnership sold all of its assets. 2. Adds a new section to the tax code (Section 710) that treats the net capital gain and loss from "investment services partnership interests" as ordinary income and loss, respectively, subject to certain exceptions. An "investment services partnership interest" is an interest in a partnership that primarily engages in investment management services. 3. Applies the rules in Section 710 to the disposition of investment services partnership interests and distributions of partnership property. 4. Imposes a 40% penalty on certain underpayments related to the avoidance of the provisions in Section 710. 5. Requires income and loss from investment services partnership interests to be taken into account in determining an individual's net earnings from self-employment. The provisions generally apply to tax years ending after the date of enactment, with some exceptions related to existing partnerships and dispositions.