During 2008, a harsh bill was introduced that would change the taxation of the carried interests that general partners might have in a real estate partnership. Under current law, those interests are taxed at capital gains rates (currently 15%). The legislation changed the rule so that carried interests in real estate partnerships (and many other investment arrangements, as well), would be taxed as ordinary income. The 2008 bill was incorporated into a larger bill and did pass the House in 2008. The Senate never took up the underlying bill.

During the week of December 9, a significantly modified, but still very harsh, version of the carried interest changes passed the House. The provision did not pass on its own merits; rather, the revenues it would generate were used to "pay for" an extension of dozens of expiring provisions. The new, revised rules continue to treat non-equity partners harshly, particularly those in existing real estate partnerships. Most general partners with existing carried interests will be penalized under the new rules. Extensive rules for carried interests in real estate partnerships are provided, so that some real estate general partners will continue to receive capital gains treatment, while many will face ordinary income treatment.

The so-called "extenders package," H.R. 4213, passed the House on a largely party-line vote of 241 - 186. It is not known when or if the Senate will take up the extenders bill before the new year.