Understand the relevant tax issues that apply to derivatives and how market participants are classified.
There is no uniform set of U.S. federal income tax rules for the treatment of derivatives and market participants. In addition, the character and timing of income vary depending on the type of derivative and the status of the market participant. This presentation will explain how the U.S. federal income tax rules treat derivatives and market participants and provide you with working knowledge of what you need to consider when entering into a derivative transaction. After attending, you will be able to spot the relevant tax issues that apply to derivatives and understand how market participants are classified and what the consequences of that classification are.
Learning Objectives
- You will be able to differentiate between forward and future contracts.
- You will be able to recognize characteristics of Option Contracts
- You will be able to recognize the fundamentals of swap agreements
- You will be able to recognize the fundamentals of Notational Principal contracts
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Agenda
Financial Products Tax Analysis
- Character of Income and Timing Issues - Why They Matter
- Status of a Taxpayer (i.e., Hedger, Dealer, etc.) and Why It Matters
- What Options Do Taxpayers Have Vis-a-Vis Elections or Identifications to Impact the Timing and Character of a Derivative Transaction
Types of Products
- There Is No Uniform Set of Tax Rules for the Treatment of Derivatives - Character and Timing Depend on the Type of Derivative Transaction
- Distinguishing Between a Forward Contract, a Futures Contract, and an Option Contract
- Understanding When a Product Constitutes a 1256 Contract and What This Means
- Understanding How Swaps (i.e., Notional Principal Contracts) Are Taxed
Types of Taxpayers
- Understanding What It Means to Be an Investor and the Federal Tax Impact of Such a Classification
- Understanding What It Means to Be a Trader and the Federal Tax Impact of Such a Classification
- Understanding What It Means to Be a Dealer and the Federal Tax Impact of Such a Classification
- Understanding What It Means to Be a Hedger and the Federal Tax Impact of Such a Classification
Straddle Transactions
- Definition of a Straddle - Offsetting Positions With Respect to Actively Traded Personal Property
- Consequences of a Straddle - Loss Deferral and Capitalization of Costs
- Exceptions to Straddle Rules
Special Rules for Hedgers and Dealers
- What Is a Qualified Hedging Transaction for Federal Income Tax Purposes?
- Dealers in Securities and Commodities and the Relevant Character and Timing Issues
Foreign Currency Transactions
- What Is a Nonfunctional Currency Transaction, and How Are They Treated for Federal Income Tax Purposes?
- What Elections Are Available for Nonfunctional Currency Transactions?
- What Are the Relevant Hedging Rules for Nonfunctional Currency Transactions?
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Credits
OnDemand Course
This course was last revised on December 6, 2022.
Call 1-866-352-9540 for further credit information.
- AIPB 1.5
- This program is acceptable for 1.5 CPEC(s) towards the CB designation through the American Institute of Professional Bookkeepers (AIPB).
- AR CLE 1.5
- This course has been approved for 1.5 hours of CLE by the Arkansas CLE Board.
- Arizona CLE 1.5
- The Arizona State Bar does not pre-approve or pre-certify MCLE programs. However, records of this program and attendance will be maintained by Lorman Education Services for auditing purposes. This activity may qualify for up to 1.5 hours toward your annual CLE requirement for the State Bar of Arizona.
- CA MCLE 1.5
- Lorman Business Center, LLC. is a State Bar of California approved MCLE sponsor and this course qualifies for 1.5 CLE hours of participatory credit.
- CT CLE 1.5
- Neither the Connecticut Judicial Branch nor the Commission on Minimum Continuing Legal Education approve or accredit CLE providers or activities. This course has been approved for CLE credit in jurisdictions aside from CT and therefore it automatically meets the content and delivery requirements in Connecticut. Credit is based on a 60 minute credit hour and shall be awarded as follows: 1.5 CLE credit(s).
- GA CLE 1.5
- This program has been approved by the Georgia Commission on Continuing Lawyer Competency for 1.5 CLE hours.
- HI CLE 1.5
- This program was approved by the Hawaii State Board of Continuing Legal Education for 1.5 CLE credit hours.
- MO CLE 2.0
- This course qualifies for self-study CLE credit in Missouri.
- NH MCLE 1.6
- NH MCLE does not approve or accredit CLE activities for the NH Minimum CLE requirement. Lorman Education Services believes this Ondemand course meets the requirement of NH Supreme Court Rule 53 and may qualify for CLE credit(s). Program Length: 98 Minutes.
- PA CLE 1.5
- This Distance Learning program has been approved by the Pennsylvania Continuing Legal Education Board for 1.5 hours of substantive law, practice and procedure CLE credit.
- RI CLE 1.5
- This program has been approved by the Rhode Island Mandatory Continuing Legal Education Commission for 1.5 hours of CLE credit.
- VT CLE 1.5
- This self-study program has been approved by the Mandatory Continuing Legal Education Board of Vermont for 1.5 hour(s) of CLE credit. Please note: Attorneys may only claim 12 credits per compliance period in this format. This course is considered "Non-Moderated Programming without Interactivity".
- WV MCLE 2.0
- This program has been approved by the West Virginia State Bar MCLE Commission for 2.0 MCLE hours.
CPE/NASBA - QAS Self Study 2.6 including Taxes 2.6
- Lorman Education Services is registered with the National Association of State Boards of Accountancy (NASBA) as a QAS Self Study sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: www.nasbaregistry.org. For more information regarding administrative policies such as complaint and refund, please contact our offices at 866-352-9539. CPE Credit: Maximum Credit Hours: 2.6 each session (based on a 50 minute credit hour). You must attend at least 50 minutes to obtain credit. Field of Study: Taxes for 2.6 hours. Prerequisite: . Level of Knowledge: Intermediate. Teaching Method: Seminar/Lecture. Advance Preparation: None. Delivery Method: QAS Self Study. Please refer to the information in this advertisement for outline, course content and objectives. Upon completion of this course, you will receive a certificate of attendance. Final approval of a course for CPE credit belongs with each state's regulatory board.
To earn each credit Lorman offers through the OnDemand learning platform, you need to watch 100% of the program. Also, for certain credits you will need to fulfill additional requirements which will be displayed on the "credits" tab when viewing the course.
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Faculty
Nicholas C. Mowbray
Baker & Hostetler LLP
- Counsel, Baker & Hostetler LLP
- Practice focuses on international tax and financial products tax matters
- Advises funds, investment managers, multinationals across various industries, and individuals on the U.S. federal income tax treatment of debt, commodities, derivatives, and cryptocurrencies
- Co-author of Financial Products: Taxation, Regulation, and Design, a leading treatise on the tax and regulatory treatment of financial products
- Speaks regularly on topics associated with financial products
- Admitted to practice in Washington D.C. and Illinois
- J.D. degree, Chicago-Kent College of Law; LL.M. degree, Northwestern University; B.A. degree, University of Michigan
- Can be contacted at [email protected] or 202-861-1704
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
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