The IRS finalized requirements related to certain financial products that provide for "payments contingent upon, or determined by, reference to U.S. source dividend payments."
The IRS will delay the effective/applicability date of certain rules in the final Section 871(m) regulations, and extend parts of the phase-in period by one year.
The Internal Revenue Service and the Treasury submitted final and temporary regulations to the Office of the Federal Register regarding requirements related to equity-linked instruments.
Senator Ron Wyden (D-OR) introduced a draft bill that would amend the Internal Revenue Code to revise the tax treatment of derivatives and their underlying investments.
The IRS plans to issue new proposed regulations in 2015 to deal with the tax treatment of swaps with contingent nonperiodic payment swaps. The IRS and Treasury are also expected to issue "in the very near term" final regulations under Section 871(m) of the Internal Revenue Code which requires taxes to be withheld on payments (or deemed payments) to non-U.S. persons of dividend equivalents on certain equity swaps and equity derivatives referencing U.S. stocks. The final regulations were originally targeted for issuance by the end of 2014 with an effective date of January 1, 2016, to allow