Tax Law Changes To Cope With Advent Of Single-Security Futures Contracts
- Topics:
- Commercial Lending
- Tags:
- Finance,
- Taxes,
- Stock,
- Security,
- Regulations,
- Investment,
- Internal Revenue Code,
- Government,
- Futures Contract,
- Financial Planning,
- ...
- Source:
- Twenty-First Securities
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Overview: At the end of december an Act was passed that gave the Commodity Futures Trading Commission the authority to regulate futures contracts on single stocks as well as certain “narrow based indexes” Changes were also made to the Internal Revenue Code to deal with these new securities. Section 1091 governing the disallowance of losses on wash sales was amended so that it would apply in the case where an investor sold a security at a loss and then acquired a single stock future contract on a substantially identical security within 30 days of the loss transaction. However, the change to Sec. 1091 may have been broad enough to cover other transactions that investors are currently doing to circumvent the wash sale rules. Many changes have been made to the Internal Revenue Code in anticipation of the trading of securities futures contracts. While many of the changes will be prospective on the issuance of new instruments, such as single-stock futures, a few changes already apply to existing options and notional principal contracts.
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Format: HTML | Date: Apr 2001 | Pages: 1
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