Taxation of Structured Debt in a Low-Rate Environment
Omri Y. Marian
University of Florida - Fredric G. Levin College of Law
Andrew D. Moin
Sullivan & Cromwell - New York Headquarters
April 16, 2012
135 Tax Notes 323 (2012)
Low market rates call for special types of debt instruments. This report discusses the tax questions presented by several of those instruments, including fixed-to-floating rate instruments, range accrual debt instruments, and callable step-up instruments. The authors note several ambiguities in the regulations regarding variable-rate and contingent payment debt instruments and call for clarification. They also explore some counterintuitive results of the technical operation of the regulations and argue that a possible explanation may be that the regulations were drafted during times of different market characteristics.
Number of Pages in PDF File: 14
Keywords: Taxation of Financial Instruments, Taxation of Structured Debt, Original Issue Discount
JEL Classification: H25, K34Accepted Paper Series
Date posted: April 18, 2012
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