Camp, the chairman of the House Ways and Means Committee, released the draft as part of a plan to overhaul the U.S. tax code. The proposals affecting partnerships are the third in a series of drafts that would make structural changes to long- standing features of the tax code.

The first two drafts, if turned into law, would be the most significant rewrite of international tax rules since 1962 and the most fundamental rethinking of taxation of financial products since the modern income tax began in 1913.

Camp, a Michigan Republican, hasn’t unveiled the rest of his plan, which he wants to advance through his committee this year. He has asked industry groups and others affected by the potential changes to offer comments.

“It’s potentially a very positive step forward, and it’s potentially a very negative step forward depending on how this section would fit in the larger tax reform mosaic of provisions dealing with real estate,” said Jeff DeBoer, president and chief executive officer at the Real Estate Roundtable. The Washington group’s board of directors includes executives of Dune Real Estate Partners LP and Hutensky Capital Partners.

Partnerships and other pass-through entities have become a popular way to organize businesses in the past 30 years, because of tax-rate reductions for individuals, a double tax on corporate profits and interaction with state legal structures.

Business Receipts

Such pass-through entities accounted for 38 percent of business receipts in 2007, up from 14 percent in 1980, according to the Congressional Budget Office. Some large businesses are organized as partnerships, including global accounting firms such as Ernst & Young LLP.

In 2010, 48 percent of partnerships were in the real estate, rental and leasing industries, according to the Internal Revenue Service. Finance and insurance partnerships reported 48 percent of net income.

The draft proposal on pass-through entities presented two options, an incremental set of changes known as Option 1 that have been discussed for several years and the more significant changes called Option 2.

Broader Shift