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Tax Law Roundup current law developments in U.S. taxation

Category Archives: Securities

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IRS Releases FATCA Model Agreement for Foreign Financial Institutions

Posted in Compliance, General, International, Securities

The IRS continues its string of guidance on the Foreign Account Tax Compliance Act (FATCA) by issuing Notice 2013-69, which (1) includes a model participating FFI agreement and (2)  provides guidance to Foreign Financial Institutions (FFIs) and branches of FFIs treated as reporting financial institutions under an applicable Model 2 intergovernmental agreement (IGA) (reporting Model 2… Continue Reading

10th Circuit Affirms Taxability of Variable Prepaid Forward Contracts

Posted in Economic Substance, General, Securities

The Tenth Circuit, in Anschutz v. Commissioner, affirmed a Tax Court decision taxing the disposition of appreciated stock through a Variable Prepaid Forward Contract (VPFC).  The underlying issue was whether the complex financial arrangement created a taxable constructive sale.  The transaction involved a series of contracts including (1) a “forward contract” to sell the appreciated… Continue Reading

Court Rules Taxpayer Not a “Trader” – Losses Suspended

Posted in Deductions, Securities

In a Tax Court Memorandum decision, the court denied a taxpayer’s “trader” status, suspending over $2 million in loss deductions from stock trades and imposing penalties. The court found that the taxpayer did not meet the definition of a “trader” who is engaged in the trade or business of selling securities for their own account…. Continue Reading

FAQs on Cost-Basis Reporting for Brokers

Posted in Securities

The IRS published a list of Frequently Asked Questions on the new expanded tax reporting requirements for brokers which include reporting their customer’s tax basis and holding period information. The guidance explains the types of securities covered, how to report tax basis if less than all securities are sold, when returns are due, who qualifies… Continue Reading