Elective Taxation of Risk-Based Financial Instruments: A Proposal

36 Pages Posted: 22 Sep 2009  

Samuel D. Brunson

Loyola University Chicago School of Law

Date Written: September 22, 2009

Abstract

The current state of taxation of financial instruments is a mess. The rules are complicated, unfair, inconsistent, and patchwork; because Congress creates rules for new instruments in reaction to perceived abuses, there is no underlying policy or vision guiding the development of the rules.

This Article proposes a unified regime for taxing financial instruments, one that will not require further amendment to the Internal Revenue Code (the "Code") or to the Treasury regulations every time a new instrument is introduced, minimizes inefficiencies that lead to tax planning, and is simple to understand and implement.

Keywords: tax, financial instruments, derivatives, election, mark-to-market, risk-based

Suggested Citation

Brunson, Samuel D., Elective Taxation of Risk-Based Financial Instruments: A Proposal (September 22, 2009). Houston Business and Tax Law Journal, Vol. 8, No. 1. Available at SSRN: https://ssrn.com/abstract=1459073

Samuel D. Brunson (Contact Author)

Loyola University Chicago School of Law ( email )

25 E. Pearson
Chicago, IL 60611
United States

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