Senate Finance Committee Chair Ron Wyden, D-Ore., recently introduced a bill (S. 2621) to require mark-to-market accounting on derivatives at the end of each year, with any gain or loss treated as ordinary gain or loss.
The bill represents fairly robust reform of derivative taxation, with complex technical provisions that would affect the sourcing, timing, character, and definitions of derivatives. The bill would repeal nine code sections and revise many others.
Democrats have been targeting derivatives for several years, and the legislation could gain traction as potential “pay-fors” for the upcoming reconciliation package this fall. The Joint Committee on Taxation has estimated the bill would raise $16.5 billion over 10 years.
Dustin Stamper is a managing director in Grant Thornton’s Washington National Tax Office and leads the tax legislative affairs practice for the firm.
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