Live Updates > Live Update Details
2026-02-21 04:39:54
The U.S. Treasury Department is considering revising a proposal for comprehensive reform of the way sovereign wealth funds and public pension funds are taxed. This comes after private lending and private equity firms warned that such reforms could discourage foreign investment in the U.S. market. A Treasury spokesperson said the decision was made after government officials listened to feedback from the investment and real estate sectors, stating that the proposal is being revised to address key issues and ensure it is conducive to stable, long-term capital flows. The proposal, put forward by the IRS, would update Section 892 of the tax code, classifying most of these funds' U.S. debt investments as commercial activities, thus subjecting them to taxation. Investments not classified as commercial activities would not be taxed. Jennifer Han, chief legal officer of the Funds Management Association, had warned that this rule change "would discourage foreign investment in the U.S. market."
