Treasury recently delivered two sets of proposed regulations to the Office of Management and Budget for review, bringing them closer to public release.

Proposed regulations under section 1061 would address the treatment of carried interests under the Tax Cuts and Jobs Act, which generally imposes a 3-year holding period as a precondition to treating gain in respect of carried interests as long-term capital gain. Individuals are entitled to preferential tax rates in respect of long-term capital gain.

Proposed regulations under section 163(j) would address the treatment of the business interest expense limitation under the Tax Cuts and Jobs Act, which generally limits business interest expense deductions to (1) business interest income plus (2) 30% of EBITDA (or 30% of EBIT, beginning in 2022).