The carried interest legislation, which is attached the the tax extenders bill, is still alive in the Senate (I think). The latest language, an amendment to the bill offered by Baucus, is available here.
The latest version would tax carried interest as 75% ordinary income and 25% capital gain. If the underlying assets of the partnership have been held for 5 years or longer, allocations would be treated as 50% ordinary income and 50% capital gain. The favorable rate for 5 year assets especially helps venture capital firms and some private equity and real estate firms.
The private equity industry has been aggressively fighting to change the bill’s treatment of a sale of a partnership interest (proposed section 710(b)), which they call an enterprise value tax. The latest version of the bill would extend a 50/50 blended rate to the portion of the sales proceeds attributable to goodwill. I’ll try to post more about this later.