WASHINGTON -- The tax-exempt bond market and some investment banking firms may be hurt by pending tax simplification legislation that would treat as taxable the tax-exempt bond interest earned by large investment partnerships, securities officials said this week.

The legislation, which would take effect in the 1992 tax year for large partnerships whose tax-exempt interest income is less than 50% of their assets, was proposed to benefit such groups by simplifying their reporting and record-keeping requirements, House Ways and Means Committee aides said. These partnership have more than 250 investors who share income and tax benefits from securities, real estate, oil and gas, or other investments.

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