Revised House tax bill takes aim at offshore accounts


In the latest twist in the tax debate, the U.S. House of Representatives passed a bill Wednesday that could result in a large tax increase on hedge fund earnings.

The measure, H.R. 4351, attempts to reduce the impact of the alternative minimum tax (AMT) on middle-class Americans – and to pay for this relief by closing a loophole that allows hedge funds to defer taxable gains earned in offshore accounts. The effort still faces difficult passage in the Senate, and President Bush has promised a veto.

Eliminating the offshore income tax deferral for hedge funds could recover a projected