On August 5, 2021, Senate Finance Committee Chairman Ron Wyden introduced the “Ending the Carried Interest Loophole Act” (the “Wyden Bill”), which proposes to change the taxation of carried interest by analogizing carried interest to an interest-free loan. Under the Wyden Bill, holders of carried interest would be required to include a “deemed compensation amount,” representing deemed interest on a hypothetical loan, as ordinary income on an annual basis. The “deemed compensation amount” would equal the yield on certain high-quality corporate bonds for the applicable year (which, for June 2021, is equal to 1.21%) plus 9% (total of 10.21%), multiplied by an amount equal to (x) the holder’s highest share of profits of the partnership multiplied by the invested capital of all partners minus (y) the holder’s invested capital in the partnership. The holder would concurrently recognize a long-term capital loss equal to the deemed compensation amount.