1040 خط 21 الفوركس

1040 خط 21 الفوركس

أسعار الفوركس تايلاند باهت
أفضل الفوركس الأخبار
الخيارات الثنائية الفتوة نظام التداول


أرباح تداول الفوركس الخيار الثنائي أبا إيتو أفضل منصة الفوركس التجريبي الفوركس xb4 نظام التداول سلخ فروة الرأس إشارات التداول بيتكوين أبا إيتو فراكتال بادا فوريكس

خطوة أخرى أيضا. يرجى إكمال الفحص الأمني ​​للدخول إلى ليتسبيد. لماذا يتعين علي إكمال اختبار كابتشا؟ إكمال اختبار كابتشا يثبت أنك إنسان وتمنحك إمكانية الوصول المؤقت إلى موقع الويب. ماذا يمكنني أن أفعل لمنع ذلك في المستقبل؟ إذا كنت على اتصال شخصي، كما هو الحال في المنزل، يمكنك تشغيل فحص مكافحة الفيروسات على جهازك للتأكد من أنه لم يصاب مع البرامج الضارة. إذا كنت في مكتب أو شبكة مشتركة، يمكنك أن تطلب من مسؤول الشبكة إجراء فحص عبر الشبكة تبحث عن الأجهزة التي تمت تهيئتها بشكل خاطئ أو المصابة. كلودفلار راي إد: 3e21a1a6a4d68b58 & بول؛ إب الخاص بك: 78.109.24.111 & الثور؛ الأداء & أمب؛ الأمن من قبل كلودفلار. فوركس الضرائب - هل لديك لدفع؟ تنطبق المقالة أدناه على قواعد ضريبة الفوركس على التجار الأمريكيين فقط. المستثمرون الأجانب الذين ليسوا مقيمين أو مواطنين من الولايات المتحدة الأمريكية لا يضطرون لدفع أي ضرائب على أرباح الصرف الأجنبي. من فضلك، طلب المشورة من خبير الضرائب تاجر إذا كان لديك أي شكوك بشأن ضرائب الفوركس. يسعى معظم تجار العملة إلى أن يعاملوا مثل السلع والتجار الآجلة، حيث أن مكاسبهم وخسائرهم التجارية تعامل كقسم 1256 عقدا. كل من تجار الأعمال والمستثمرين يعلنون القسم 1256 عقود كأرباح وخسائر رأسمالية على النموذج 6781 (المكاسب والخسائر من القسم 1256 العقود والسترات). وهذا يتيح لهم تقسيم المكاسب والخسائر 60/40 على الجدول D: 60 في المئة على المدى الطويل، 40 في المئة على المدى القصير. هذا الانقسام 60/40 يعطي تجار السلع والمستثمرين ميزة على تجار الأوراق المالية. ويخضع 60٪ للضريبة على أساس معدالت األرباح الرأسمالية األقل على المدى الطويل) تصل إلى 15٪ (، ويتم فرض ضريبة على 40٪ على معدالت األرباح الرأسمالية األعلى قصيرة األجل) أو ما يعادله من المعدل العادي و٪ 35 (. لاحظ أن الخسائر إيرك 1256 يمكن أن يتم إعادة ما يصل إلى ثلاث سنوات ضريبية، ولكن فقط ضد إيرك 1256 مكاسب في السنوات الثلاث السابقة الضرائب. وقد تعوض الخسائر العادية أي نوع من أنواع الدخل. مجموعة من أنظمة الفوركس والمؤشرات والاستراتيجيات، وتشمل الفوركس محلل برو. 100٪ تحميل مجاني. تعلم وتنزيل استراتيجيات الخيارات الثنائية الحرة وأنظمة التداول! تحميل واحد من أفضل أنظمة الفوركس الحرة لتداول العملات الأجنبية مربحة! فوركس. 97 & # 32؛ пользователей находятся здесь. МОДЕРАТОРЫ. ورايغستين ترادينغ بينيس فور دولارس فسماركيتماكر بروفيسيونال ترادر ​​Hot_Biscuits_ نماذج وزجاجات spicy_pasta ريتشيغ المنجم المالي El_Huachinango مود finance_student بروب ترادر ​​о команде модераторов & راكو؛ مرحبا بكم في رديت، الصفحة الأولى للإنترنت. والاشتراك في واحدة من الآلاف من المجتمعات المحلية. отправлено & # 32؛ 12 месяцев назад & # 32؛ автор & # 32؛ user3404 ليف ترادر. تريد إضافة إلى المناقشة؟ [-] A_Harsh_Euphemism 2nd يار ليف، تيشنيكالز ترادر ​​& # 32؛ 1 очко 2 очка 3 очка & # 32؛ 12 месяцев назад (0 дочерних комментарев) помощь правила сайта центр поддержки вики реддикет مود غدلينس связаться с нами. приложенияи инструменты رديت لأيفون رديت لالروبوت موقع الجوال кнопки. Использование данного сайта означает، что вы принимаете & # 32؛ пользовательского соглашения & # 32؛ и & # 32؛ Политика конфиденциальности. &نسخ؛ 2018 ريديت инкорпорейтед. Все права защищены. يتم تسجيل ريديت وشعار ألين علامات تجارية مسجلة لشركة رديت إنك. وبي. تم تقديمه بواسطة بيد 57356 في & # 32؛ أب-186 & # 32؛ في 2018-01-24 08: 30: 34.364934 + 00: 00 تشغيل 5174e04 رمز البلد: وا. نصائح ضريبية لتجار الفوركس (الجزء الرابع) 02/22/2008 12:00 آم إست. "على افتراض أن الاختبار الأول يتم استيفاؤه، فإن الشرط الثاني هو أن العقد يجب أن يتم تداوله في السوق بين البنوك، ويصف التاريخ التشريعي السوق بين البنوك كسوق غير رسمية من خلالها يتم التفاوض على بعض عقود العملات الأجنبية بين أي واحد من عدد من وتشمل العقود المتداولة في السوق ما بين البنوك عموما العقود المبرمة بين مصرف تجاري وشخص آخر، وكذلك العقود المبرمة مع تاجر عمولة العقود الآجلة (فم) الذي يشارك في سوق ما بين البنوك، ووفقا للتاريخ التشريعي، التي ليس لديها مثل هذا البنك أو فم، أو أي مشارك آخر مماثل في السوق ما بين البنوك، ليس عقدا بالعملة الأجنبية ". هل سيطلب من وسطاء الفوركس الإبلاغ عن الفوركس في 1099؟ وقد استشارنا وسيط تداول الفوركس مؤخرا حول ما إذا كان ينبغي إصدار 1099s من أجل حسابات تداول العملات الأجنبية الخاصة بهم أم لا. ممارسة الصناعة وقانون ضريبة النقد الأجنبي تملي أن حسابات النقد الأجنبي معفاة من 1099 التقارير. فقط إيرادات الفائدة على حسابات الفوركس هي 1099 تقرير. أخبرنا وسيط الفوركس المذكور أعلاه أن شركة المحاسبة الكبيرة الأربعة كانت تريد في البداية إصدار 1099 ثانية لحسابات الفوركس بنفس الطريقة التي يصدر بها وسيط العقود الآجلة 1099s لعقود إيرك 1256. وأوضحت الشركة الأربعة الكبرى أن الفوركس يعتبر الآن منتجا مستقبلا ذا صلة. علمنا لاحقا أن الشركة الأربعة الكبرى غيرت رأيهم وقررت مواصلة سياسة الصناعة من أي شكل 1099 الإبلاغ عن مكاسب وخسائر تداول العملات الأجنبية. في كل عام، يلاحظ واضعو الضرائب لدينا أن اثنين من وسطاء الفوركس (عدم تسمية الأسماء هنا) إصدار العقود الآجلة 1099s لحسابات تداول العملات الأجنبية الخاصة بهم. سمعنا مؤخرا أن واحدا من هؤلاء الوسطاء الفوركس يرسل فقط 1099 لعملائها وليس أيضا إلى مصلحة الضرائب. هذا غريب، كما 1099s ويهدف إلى أن يودع مع مصلحة الضرائب. التقارير الضريبية عن الفوركس. إذا كان موقفك هو أن خسارة الفوركس الخاصة بك يجب أن تكون عادية (انظر أعلاه)، والنظر في تقديم خسارة تداول العملات الأجنبية أولا في نموذج 6781 (بحيث يمكن إرس مطابقة التقارير 1099 مع أجهزة الكمبيوتر الخاصة بهم)، ومن ثم نقل خسائر تداول الفوركس إلى منطقة أخرى من الإقرار الضريبي (الخط 21 من النموذج 1040 للمستثمرين أو النموذج 4797 الجزء الثاني لتجار الأعمال). استخدام الخط 21 الدخل أو الخسارة الأخرى في النموذج 1040 للمعاملات في إيرك 988 هي ممارسة مقبولة من قبل الصناعة، على الرغم من أنها لم تذكر في أي نماذج الضرائب إرس أو تعليمات النموذج. لاحظ أن إيرك 988 يكتب عن إيرادات الفائدة والمصروفات للإبلاغ عن المعاملات إيرك 988. فكر في أن تجار الفوركس لا يقترضون المال في حد ذاته ولا يدفعون فائدة للمقرضين، لذا فإن استخدام نفقات الفائدة لا معنى له. إذا كان على التجار الإبلاغ عن خسائر تداول العملات الأجنبية كمصروفات فوائد، فإنه سيكون مشكلة لكثير من المستثمرين، ولكن ليس التجار التجاري. وذلك لأن المستثمرين قد يقتطعون فقط مصاريف الفوائد الاستثمارية حتى دخلهم الاستثماري، بينما يرحل الباقي إلى السنوات اللاحقة. وعلى العكس من ذلك، في جميع الحالات، يسمح تجار الأعمال كامل اقتطاع الفائدة التجارية، سواء كان لديهم دخل أم لا. يجب على التجار التجاريين (الذين لديهم وضع ضريبي للتاجر) أن يأخذوا في الاعتبار استخدام الربح أو الخسارة العادية من بيع الممتلكات التجارية في الجزء الثاني بدلا من السطر 21 من الاستمارة 1040. كما يستخدم تجار الأوراق المالية الذين يختارون ويستخدمون محاسبة إيرك 475 من السوق إلى النموذج 4797 بارت إي؛ والتي يتم انتقاؤها تلقائيا في حسابات نول (صافي الخسارة التشغيلية). الخط 21 هو أكثر من العلم الأحمر إلى مصلحة الضرائب. يجب على التجار تقديم نموذج 8886 (بيان الإفصاح عن المعاملات) إذا كان لديهم "معاملات تؤدي إلى خسائر لا تقل عن مليوني دولار في أي سنة ضريبية واحدة (50،000 دولار إذا كان ذلك من بعض المعاملات بالعملة الأجنبية) أو 4 ملايين دولار في أي مجموعة من السنوات الضريبية "وتتعلق المعاملات الأخرى المذكورة في النموذج 8886 في الغالب بمعاملات المأوى الضريبي. يجب على تجار الفوركس استشارة خبير ضريبة النقد الأجنبي (مثل شركتنا) لمزيد من المناقشة والقرارات لجعل الإبلاغ الضريبي عن معاملات الفوركس الخاصة بهم. ونوصي أيضا بأن يشمل تجار الفوركس حاشية الإقرار الضريبي مع تقديمهم لشرح هذا العلاج. ملصق تحذير واقتراحات لكيفية المتابعة. يجب على التجار استشارة خبير ضريبة النقد الأجنبي على أساس التشاور واحدا تلو الآخر. لدينا محتوى موقع ويب أعلاه وطوال هو لأغراض تعليمية فقط. نحن لسنا مسؤولين عن أي المواقف التي استقراء وتأخذ لوحدك. يوفر غرينترادرتاكس الاستشارات وخدمات إعداد الضرائب. يوفر محامي الضرائب المستقلين آراء قانونية عند الحاجة (انظر أعلاه). في الوقت الضريبي، من المهم أن توفر المحاسب الخاص بك مع المحاسبة التجارة الفوركس الخاص بك، عن طريق بقعة، إلى الأمام، خيارات العملات أوتك، العقود الآجلة أو غير ذلك. لم نر إرس عدم السماح بمعاملة ضريبة النقد الأجنبي بناء على المحتوى السابق. ولكن من غير المؤكد جدا معرفة كيف يمكن لمصلحة الضرائب أن تتفاعل في المستقبل. من الممكن أن يسعى وكيل أو مكتب إرس واحد إلى رفض معالجة الخسائر العادية لخسائر تداول الفوركس حيث يمكن لعامل أو مكتب إرس آخر أن يسعى إلى رفض معدلات ضريبية أقل بنسبة 60/40 على مكاسب تداول العملات الأجنبية. على الرغم من أن هذا يبدو أن يستبعد بعضها بعضا، فمن الممكن تماما في العالم الحقيقي! إذا حصلت على إشعار أو إجراء مصلحة الضرائب في هذا الصدد، فإننا نقترح بشدة أن تتصل بالشركة للحصول على المساعدة. إذا كان لديك أي أسئلة أو بحاجة إلى مساعدة على ضريبة النقد الاجنبى، يرجى مراسلتنا على البريد الإلكتروني @ غرينكومباني أو الاتصال بنا على 877-662-2018. مقالات ذات صلة في الفوركس. لا يزال المسار المستقبلي لمجلس الاحتياطي الفدرالي يبدو أكثر صعودا من البنك المركزي الأوروبي. إذا كان الأمر كذلك، فإن ييل. فكرة التجارة: لا ضمانات هنا بالطبع، ولكن ربما انها و رسكو؛ ق العلم الحذر الصغيرة ل الدولار الثيران. واعتبارا من أغسطس 2018، شكلت الرنمينبي (رمب) في المدفوعات عالميا 2.8 في المئة من المجموع، و. لدينا الحصان المفضل لركوب هنا ل & لدكو؛ تصحيح & رديقو؛ أقل سيكون اليورو. ونحن سوف. الأحداث القادمة. التركيز: أفضل الأفكار المال لعام 2018. فوكوس: العقود المستقبلية، والخيارات، & أمب؛ Crytocurrencies. روابط إعلانية. فيكتورفيست، Inc. 2650 W. ماركيت ستريت، ستي # 1-A، أكرون، أوه 44333. الخيارات مجلس الصناعة، و. وان نورث واكر Dr.، سويت 500، شيكاغو، إيل 60606. أدفيس تريد، Inc. يوفر أدفيستريد المجتمعات على الانترنت لتجار سوق الأسهم للتعلم والتفاعل. 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1040 لين 21 فوريكس العقود الآجلة، خطط المنافع. اعتبارا من 18 أكتوبر 2018 ستقوم لجنة تجارة السلع الآجلة الأمريكية (كفتك) بتنفيذ أول قاعدة نهائية لقانون دود-فرانك لإصلاح وول ستريت وحماية المستهلك. 848 صفحة بدف (فينريغ، 2018) بالنسبة لمواطني الولايات المتحدة الأمريكية، سيحظر ذلك بشكل فعال الوصول إلى حسابات الفوركس بالتجزئة في الخارج. فيما يتعلق بتداول المواطن الأمريكي في أي شركة فم مثل (غين كابيتال و فكسم و فكس و ألباري) وأي من شركاتها الخارجية مثل غين أوك و فكسم أوك فكس مالتا وما إلى ذلك. في 18 أكتوبر 2018 إذا تم تداول حسابك في أي من هؤلاء الوسطاء، سيتم إغلاقه وسوف يطلب منك ملء النماذج الجديدة. سيتم تكليفك من قبل الوسيط الخاص بك لتداول الفوركس في المواقع الأمريكية من أي وسيط قبالة الشاطئ. أبرز القواعد الأمريكية الجديدة: قواعد جديدة سارية المفعول 18 أكتوبر 2018 للمقيمين في الولايات المتحدة فقط. 50: 1 الهامش على معظم أزواج العملات الأجنبية بما في ذلك العملات الأجنبية الأربعة اليورو / الدولار الأمريكي، الجنيه الإسترليني / الدولار الأمريكي، الدولار الأمريكي / الين الياباني و 20 دولار أمريكي للفرنك السويسري / دولار أمريكي على معظم معظم العملات الأجنبية بما في ذلك جميع الأزواج الأخرى المقدمة أي غبب / جبي الخ يمكن أن تخفض في أي وقت من قبل كفتك) لن يسمح التحوط من المواقف. حاليا إذا كنت في كيان قبالة الشاطئ يمكنك التحوط أولا في البداية. (فيفو) إذا كان لديك مواقف متعددة على الزوج يجب إغلاقها في الترتيب الذي تم فتحه لا بقعة الذهب والفضة لا البنوك الأجنبية أو خارج- شور فكس بروكرز يتم حظر معظم معاملات البيع بالتجزئة في البورصة أوتك وفقا للقسم 742 (ج) من القانون & كوت ؛. شخص . لا يجوز تقديم أو الدخول في مع شخص غير مؤهل للمشاركة في العقد أو أي اتفاق أو عقد أو معاملة بالعملة الأجنبية إلا بموجب قاعدة أو لائحة وكالة تنظيمية اتحادية تسمح بالاتفاق أو العقد أو المعاملة وفقا للشروط والأوضاع التي تحددها الهيئة التنظيمية الاتحادية. ومثل. قواعد في التأثير قبل 18 أكتوبر 2018 للمقيمين في الولايات المتحدة. 100: 1 الهامش على جميع الأزواج. وهذا يعني أن تتلقى الآن 10.00 $ لكل نقطة لكل معيار الكثير كنت التجارة. البعض منكم يتداولون في الهامش 200: 1 الذي يمنحك ربحا أعلى عند حصولك على صفقة تداول. التحوط. إذا كنت التجارة في الكيانات قبالة الشاطئ قد التحوط مواقف أولا في البداية. إذا كنت تتداول قبالة الشاطئ يمكنك إغلاق أي من المراكز الخاصة بك في أي أمر من فضلك. الأثر العملي للتغييرات. في أكتوبر 18 2018 سوف تتلقى من $ 2.00 إلى $ 5.00 لكل نقطة تداول اعتمادا على الزوج. سوف تحتاج إلى ما يصل إلى 5 أضعاف المبلغ من المال للقيام بنفس المعاملات التي تجري اليوم هدجينغ. لن تكون قادرا على استخدام أي استراتيجيات التحوط المضي قدما أولا في البداية. لن تكون قادرا على اختيار الترتيب الذي يمكنك إغلاق الصفقات الخاصة بك. هذه التالية هي الأكثر تأثيرا كليا في وقت لاحق لا بعد 15 يوليو 2018 للمقيمين في الولايات المتحدة. القضاء على الفوركس أوتك: بعد 90 يوما من بدايته، يحظر قانون دود فرانك معظم معاملات الفوركس أوتك للتجارة بالتجزئة وفقا للمادة 742 (C) من قانون دود فرانك. القضاء على المعادن أوتك: أما بالنسبة للمعادن الثمينة غير الملوثة مثل الذهب أو الفضة، فإن المادة 742 (أ) من القانون تحظر على أي شخص [يشمل الشركات مرة أخرى] الدخول أو الدخول في الصفقة في أي سلعة مع الشخص الذي ليس مشاركا مؤهلا للعقد أو كيانا تجاريا مؤهلا، على أساس مسترد أو هامش. إعفاء البركة الصغيرة (الوسطاء المعرفون) تم الإلغاء: وفقا للقسم 403 من القانون، فإن & كوت؛ مستشار خاص & كوت؛ (المادة 3 (ب) (3) من قانون مستشاري الاستثمار لعام 1940 (& كوت؛ قانون المستشارين & كوت؛)، في غضون سنة واحدة من تاريخ سريان القانون (21 يوليو 2018). التغيير في المؤهلات المالية: يغير البند 413 (أ) من القانون المؤهلات المالية لمن يمكن اعتباره مستثمرا معتمدا، وبالتالي مؤهلا كمشارك مؤهل ("كيب"). ومن المهم أن نلاحظ أن معيار المستثمر المعتمد المنقح ينطبق فقط على المستثمرين الجدد ولا يشمل المستثمرين الحاليين. ومع ذلك، فإن الاشتراكات الإضافية من المستثمرين الحاليين تعامل عموما على أنها تتطلب تأكيدا لاستمرار أهلية المستثمرين. إغلاق الحسابات: أبلغت معظم المؤسسات المالية عملاءها في الولايات المتحدة عن آثار قانون دود-فرانك. ومع ذلك، إذا كنت لا تزال لديك حساب، اتصل وسيط الفوركس الخاص فيما يتعلق قانون دود فرانك واتخاذ الترتيبات لسحب الأموال الخاصة بك. أما التجار المقيمون في الولايات المتحدة غير المقيمين في الولايات المتحدة، فلا يتم بالضرورة تنفيذهم من خلال قانون دود-فرانك. أعلن جورج سوروس أن صندوقه مغلق أمام المستثمرين الخارجيين اعتبارا من يوليو 2018 ويوزع 1 مليار دولار في أموال العملاء. على ما يبدو فإن المبلغ المتبقي 24.5B $ من الأموال العائلية سوف تستخدم كما يراه الأنسب. روابط لبعض المعلومات الموجودة على صفحة الويب هذه: السوق الفورية (الضرائب الافتراضية عموما تحت إيرك §988 للمكاسب العادية والخسائر). العقود الآجلة والعقود الآجلة: الضرائب الافتراضية تحت إيرك §988 للمكاسب العادية & أمب؛ خسائر. إلا إذا كانت العناصر عادة M2M في 31 ديسمبر، وفي هذه الحالة الضرائب تحت إيرك § 1256 ل & كوت؛ 60/40 & كوت؛ أرباح رأس المال & أمب؛ خسائر. الخيارات: الضرائب الافتراضية تحت إيرك §988 للمكاسب العادية & أمب؛ خسائر. إلا إذا كانت العناصر عادة M2M في 31 ديسمبر، وفي هذه الحالة الضرائب تحت إيرك § 1256 ل & كوت؛ 60/40 & كوت؛ أرباح رأس المال & أمب؛ خسائر. يمكن اختيار التعثرات أعلاه من: بنود إيرك §988 يمكن أن تخضع للضريبة تحت إيرك §1256 ل & كوت؛ 60/40 & كوت؛ أرباح رأس المال & أمب؛ الخسائر إذا تم إجراء الانتخابات المناسبة. بالنسبة لبعض صناديق التحوط المحددة بموجب الفقرة 988 (ج) (1) (E) (3)، ينتج عن ذلك البند الخاص 1256 & كوت؛ 0/100 & كوت؛ أرباح رأس المال & أمب؛ خسائر. إيرك § 1256 البنود يمكن أن تخضع للضريبة تحت إيرك §988 إذا تم إجراء الانتخابات المناسبة. بشكل عام بالنسبة للبند 988 من بنود إيرك التي تخضع للضريبة بموجب إيرك § 1256 يتم إجراء الانتخابات قبل نهاية اليوم الذي يتم فيه الدخول في مثل هذه المعاملة، وفقا ل I أرسي §988 (a) (1) (B) أند ترياس. ريج. §1.988-3 (ب) (4). وميكن التحقق من ذلك عندما يتم تنفيذ املعامالت يف حساب وساطة منفصل ومنفصل كما هو موضح يف بند "ترياس". ريجس 1.988-3 (b) (5) (إي) (D). حرف الربح أو الخسارة (افتراضيا): مكاسب وخسائر العملة من الأفراد عند الانخراط في الأنشطة التجارية أو نوع الاستثمار هي المكاسب والخسائر العادية. انظر الفقرة 988 (أ) (1) (A) والمادة 988 (ه). خسائر العملات للأفراد الذين يقومون بأنشطة شخصية هي نفقات شخصية لا يمكن قبولها. انظر الفقرتين 166 و 262. § 1.165-1 (ه) الحد من خسائر الأفراد. وفي حالة الفرد، يقتصر خصم الخسائر الممنوحة بموجب المادة 165 (أ)، رهنا بأحكام البند 165 (ج) والفقرة (أ) من هذا الفرع، على ما يلي: الخسائر المتكبدة في التجارة أو الأعمال التجارية؛ الخسائر المتكبدة في أي معاملة يتم الدخول فيها من أجل الربح [على سبيل المثال. استثمار]، وإن لم يكن متصلا بعلاقة تجارية أو تجارية؛ و. خسائر الممتلكات التي لا ترتبط بعلاقة تجارية أو تجارية ولم يتم تكبدها في أي معاملة يتم الدخول فيها من أجل الربح، إذا نشأت هذه الخسائر عن الحرائق أو العواصف أو حطام السفن أو غير ذلك من الإصابات أو من السرقة، وإذا لم يسمح بالخسارة المعنية أغراض الضرائب العقارية في الإقرار الضريبي العقاري. وللاطلاع على أحكام إضافية تتعلق بخسائر الخسائر الناجمة عن الإصابات والسرقة، انظر الفقرتين 1-165-7 و1-165-8، على التوالي. إعداد التقارير (من قبل دافعي الضرائب الأفراد الذين يقدمون استمارة إرس 1040): يستخدم بعض دافعي الضرائب النموذج 4797، الجزء الثاني. يستخدم بعض دافعي الضرائب النموذج 1040، السطر 21 بدلا من النموذج 4797. أي مكان آخر مناسب حيث ينبغي الإبلاغ عن إيرادات الفوائد أو مصروفات الفوائد. صافي الخسائر من موقف واحد الذي يتجاوز 50،000 $ عموما يجب أن يتم الإبلاغ عنها في إرس شكل 8886 كذلك. يتم تسجيل المكاسب والخسائر الرأسمالية في الجدول D (وعند الاقتضاء، على نموذج مصلحة الضرائب 6781). إذا تم إجراء الانتخابات §988 إيرك ثم مطلوب من دافعي الضرائب لإرفاق بيان التحقق. بم (وحدة إدارة تخصيص النسب المئوية أو في بعض الأحيان نسبة تخصيص الأموال إدارة) لم (وحدة إدارة تخصيص الوحدات) مام (إدارة الحسابات المتعددة) ينشأ الربح أو الخسارة في أسعار الصرف في معاملة مقومة بالعملة األجنبية نتيجة للتغير في سعر الصرف بين تاريخ الحجز) التاريخ الذي يؤخذ فيه األصل أو االلتزام في االعتبار ألغراض الضريبة األمريكية (والتاريخ الذي يتم فيه الدفع) تم الاستلام. 345 مع بعض الاستثناءات، یتم معاملة أرباح أو خسائر الصرف کإیرادات أو خسائر عادیة. 346. وتشكل العقود الآجلة لبيع العملات الأجنبية حصص ملكية. 347 وهكذا، فإن تخصيص عقد آجلة للعملات ينتج مكاسب أو خسائر رأسمالية بموجب مبادئ الضرائب العامة. وبموجب القوانين الضريبية الشاملة المعمول بها في عام 1986، لا تزال معالجة المكاسب الرأسمالية أو الخسائر متاحة للعقود الآجلة أو العقود المستقبلية أو الخيارات بالعملات الأجنبية إذا كانت العقود أو الخيارات خلاف ذلك أصول رأسمالية، لا تشكل جزءا من معاملة متداخلة، قبل نهاية اليوم الذي يتم فيه الدخول في المعاملات. 348. كود الإيرادات الداخلية سيك. 988 - معاملة بعض معاملات العملات الأجنبية. 988 (أ) القاعدة العامة. على الرغم من أي أحكام أخرى من هذا الفصل - 988 (أ) (1) المعاملة كدخل عادي أو خسارة. 988 (أ) (1) (A) بشكل عام. ما لم ينص على خلاف ذلك في هذا القسم، فإن أي ربح أو خسارة بالعملة الأجنبية تعزى إلى معاملة القسم 988 يتم احتسابها بشكل منفصل ويتم اعتبارها كإيرادات أو خسائر عادية (حسب مقتضى الحال). 988 (أ) (1) (ب) القاعدة الخاصة للعقود الآجلة، إلخ. وباستثناء ما هو منصوص عليه في اللوائح، يجوز لدافع الضرائب أن يختار معاملة أي مكسب أو خسارة بالعملة األجنبية منسوبة إلى عقد آجل أو عقد آجل أو خيار موصوف في البند الفرعي) ج () 1 () ب () 3 (وهو أصل رأسمالي) في يد دافعي الضرائب والتي ليست جزءا من الحدود (بالمعنى الوارد في القسم 1092 (ج)، بغض النظر عن الفقرة (4) منه) كأرباح أو خسائر رأسمالية (حسب الحالة) إذا كان دافعي الضرائب إجراء مثل هذه االنتخابات وتحدد هذه المعاملة قبل نهاية اليوم الذي يتم فيه إبرام هذه المعاملة) أو في وقت سابق يحدده أمين الصندوق (. 988 (أ) (2) الربح أو الخسارة المعالجة كفوائد لأغراض معينة. يتم التعامل مع أي مبلغ يتم معاملته كدخل أو خسارة عادية وفقا للفقرة) 1 (كإيرادات أو مصاريف فوائد) حسب مقتضى الحال (. 988 (أ) (3) (A) بشكل عام. ما لم ينص على خلاف ذلك في اللوائح، في حالة أي مبلغ تعامل كإيرادات أو خسائر عادية بموجب الفقرة (1) (بغض النظر عن الفقرة (1) (ب))، يحدد مصدر هذا المبلغ بالرجوع إلى الإقامة من دافعي الضرائب أو وحدة الأعمال المؤهلة لدافعي الضرائب التي ينعكس على الأصول أو الخصوم أو بند الإيرادات أو النفقات على نحو سليم. ولأغراض هذا الجزء الفرعي، 988 (أ) (3) (باء) '1' بصفة عامة. ويكون مقر إقامة أي شخص - 988 (أ) (3) (B) (i) (I) في حالة الفرد، البلد الذي يقع فيه منزل الضرائب لهذا الفرد (كما هو محدد في القسم 911 (د) (3))، 988 (أ) (3) (B) (i) (إي) في حالة أي شركة أو شراكة أو ثقة أو عقار هو شخص أمريكي (كما هو محدد في القسم 7701 (أ) (30))، الولايات المتحدة الأمريكية، و. 988 (أ) (3) (ب) '1' (ثالثا) في حالة أي شركة أو شراكة أو ثقة أو ملكية ليست من الولايات المتحدة، وهي بلد غير الولايات المتحدة. إذا لم يكن للفرد بيت ضريبي (على النحو المحدد)، يكون محل إقامة هذا الفرد هو الولايات المتحدة إذا كان هذا الشخص مواطنا أمريكيا أو أجنبيا مقيما ويكون بلدا آخر غير الولايات المتحدة إذا كان هذا الفرد ليس مواطنا أمريكيا أو أجنبيا مقيما. في حالة وجود وحدة أعمال مؤهلة من أي دافعي الضرائب (بما في ذلك الفرد)، يكون مقر إقامة هذه الوحدة هو البلد الذي يقع فيه مكان العمل الرئيسي لوحدة العمل المؤهلة. 988 (أ) (3) (B) '3' القاعدة الخاصة للشراكات. وبالقدر المنصوص عليه في اللوائح، في حالة إقامة شراكة، يكون تحديد الإقامة على مستوى الشريك. 988 (a) (3) (C) القاعدة الخاصة لبعض قروض الأطراف ذات العلاقة. وباستثناء ما هو منصوص عليه في اللوائح، في حالة تقديم قرض من الولايات المتحدة أو شخص ذي صلة إلى شركة أجنبية مملوكة بنسبة 10 في المائة مقومة بعملة غير الدولار وتحمل فائدة بمعدل لا يقل عن 10 وهي أعلى من المعدل الاتحادي لمنتصف المدة (المحددة بموجب المادة 1274 (د))، عند دخول هذا القرض، تطبق القواعد التالية: 988 (أ) (3) (ج) '1' لأغراض القسم 904 فقط، يجب وضع علامة على هذا القرض على أساس السوق على أساس سنوي. 988 (أ) (3) (ج) '2' يعامل أي دخل من الفوائد المحققة فيما يتعلق بهذا القرض للسنة الخاضعة للضريبة كدخل من مصادر داخل الولايات المتحدة في حدود أي خسارة تعزى إلى البند '1'. لأغراض هذه الفقرة الفرعية، يشير مصطلح & كوت؛ الشخص المعني & كوت؛ له المعنى المعطى لهذا المصطلح بموجب المادة 954 (د) (3)، باستثناء أن يتم تطبيق هذا القسم عن طريق استبدال & كوت؛ شخص الولايات المتحدة & كوت؛ ل & كوت؛ الشركات الأجنبية الخاضعة للرقابة & كوت؛ كل مكان يظهر هذا المصطلح. 988 (أ) (3) (د) 10 في المائة تملكها مؤسسة أجنبية. مصطلح & كوت؛ 10٪ مملوكة شركة أجنبية & كوت؛ أي شركة أجنبية يمتلك فيها شخص الولايات المتحدة بصورة مباشرة أو غير مباشرة 10 في المائة على الأقل من أسهم التصويت. 988 (ب) ربح أو خسارة العملة الأجنبية. لأغراض هذا القسم - 988 (b) (1) كسب العملات الأجنبية. مصطلح & كوت؛ مكاسب العملات الأجنبية & كوت؛ يعني أي ربح من معاملة القسم 988 إلى الحد الذي لا يتجاوز فيه هذا الكسب المكاسب المحققة بسبب التغيرات في أسعار الصرف في أو بعد تاريخ الحجز وقبل تاريخ الدفع. 988 (ب) (2) خسائر العملات الأجنبية. مصطلح & كوت؛ خسارة العملة الأجنبية & كوت؛ يعني أي خسارة من معاملة القسم 988 إلى الحد الذي لا تتجاوز فيه الخسارة الخسارة المحققة بسبب التغيرات في أسعار الصرف في أو بعد تاريخ الحجز وقبل تاريخ الدفع. 988 (b) (3) القاعدة الخاصة بعقود معينة، إلخ. وفي حالة أي معاملة من بنود القسم 988 المبينة في البند الفرعي (ج) (1) (ب) '3'، فإن أي ربح أو خسارة من هذه المعاملة يعامل على أنها مكاسب أو خسائر بالعملة الأجنبية (حسب مقتضى الحال). 988 (ج) تعاريف أخرى. لأغراض هذا القسم - 988 (c) (1) القسم 988 المعاملة. 988 (c) (1) (A) بشكل عام. مصطلح & كوت؛ المقطع 988 المعاملة & كوت؛ يعني أي معاملة يرد وصفها في الفقرة الفرعية (ب) إذا كان المبلغ الذي يحق لدافع الضرائب الحصول عليه (أو المطلوب دفعه) بسبب هذه المعاملة - 988 (ج) (1) (A) (i) مقومة بعملة غير وظيفية أو. 988 (c) (1) (A) (إي) بالرجوع إلى قيمة عملة واحدة أو أكثر من العملات غير الوظيفية. 988 (c) (1) (B) وصف المعاملات. ولأغراض الفقرة الفرعية (ألف)، يرد وصف المعاملات التالية في هذه الفقرة الفرعية: 988 (ج) (1) (باء) '1' اقتناء أداة دين أو أن يصبح ملتزما بموجب صك دين. 988 (c) (1) (B) '2' استحقاق (أو مراعاة ذلك) لأغراض هذا العنوان الفرعي أي بند من بنود النفقات أو إجمالي الإيرادات أو المقبوضات التي يتعين دفعها أو استلامها بعد التاريخ الذي تستحق فيه هذه المبالغ أو مأخوذ فى الإعتبار. 988 (ج) (1) (ب) '3' الدخول في أي عقد آجل أو عقد آجل أو خيار أو أداة مالية مماثلة أو الحصول عليها. ويجوز للأمين أن يصف اللوائح التي تستثني من تطبيق البند (2) أي صنف من الأصناف التي لا تأخذ في الحسبان ما هو ضروري لتنفيذ أغراض هذا القسم بسبب الكميات الصغيرة أو الفترات القصيرة المعنية أو غير ذلك. 988 (c) (1) (C) القواعد الخاصة للتخلص من العملة غير الوظيفية. 988 (c) (1) (C) (i) بشكل عام. في حالة أي تصرف في أي عملة غير وظيفية - 988 (ج) (1) (C) (i) (I) تعامل هذه المعاملة على أنها معاملة من باب 988، و. 988 (ج) (1) (C) (i) (إي)، فإن أي مكسب أو خسارة من هذه المعاملة تعامل كربح أو خسارة بالعملة الأجنبية (حسب مقتضى الحال). 988 (c) (1) (C) '2' العملة غير الوظيفية. لأغراض هذا القسم، يشير مصطلح & كوت؛ العملة غير الوظيفية & كوت؛ يشمل عملة أو عملة، والعمالت غير العاملة بالعمالت أو الودائع ألجل أو األدوات المماثلة الصادرة عن بنك أو مؤسسة مالية أخرى. 988 (c) (1) (D) استثناء لبعض الأدوات المحددة للسوق. 988 (ج) (1) (دال) '1' بصفة عامة. ولا تنطبق الفقرة (3) من الفقرة الفرعية (ب) على أي عقد مستقبلي منظم أو خيار غير محدد يتم وضعه في السوق بموجب البند 1256 إذا كان يحتفظ به في اليوم الأخير من السنة الخاضعة للضريبة. ويجوز لدافع الضرائب أن ينتخب أن يكون البند (1) لا ينطبق على دافعي الضرائب. وينطبق هذا الانتخاب على العقود التي تعقد في أي وقت خلال السنة الخاضعة للضريبة التي يجري فيها هذا الانتخاب أو أي سنة خاضعة للضريبة، ما لم يلغ هذا الانتخاب بموافقة الأمين. 988 (c) (1) (D) (إي) (إي) تايم فور ماكينغ إلكتيون. وباستثناء ما هو منصوص عليه في اللوائح، يتم إجراء الانتخابات بموجب البند (1) لأي سنة خاضعة للضريبة في أو قبل اليوم الأول من هذه السنة الخاضعة للضريبة (أو، في وقت لاحق، في اليوم الأول أو قبله خلال تلك السنة التي يحتجز فيها المكلف عقد موصوف في البند "1"). 988 (c) (1) (D) (إي) (إي) سبيشيال رول فور بارتنيرشيبس، etc. وفي حالة الشراكة، يتم إجراء انتخابات بموجب الفقرة الفرعية (1) من قبل كل شريك على حدة. وتنطبق قاعدة مماثلة في حالة شركة S. 988 (ج) (1) (دال) '3' معاملة بعض الشراكات. ولا تسري هذه الفقرة الفرعية على أي دخل أو خسارة في شراكة لأي سنة خاضعة للضريبة إذا كانت هذه الشراكة قد أجرت انتخابات بموجب الفقرة الفرعية (هاء '3') (خامسا) لهذا العام أو أي سنة سابقة. 988 (ج) (1) (هاء) '1' بصفة عامة. وفي حالة صندوق مؤهل، لا ينطبق البند '3' من الفقرة الفرعية (ب) على أي صك من شأنه أن يميز بالسوق بموجب المادة 1256 إذا كان يحتفظ به في آخر يوم من السنة الخاضعة للضريبة (يحدد بعد تطبيق البند ( رابعا)). 988 (c) (1) (E) (إي) القاعدة الخاصة عندما لا يكون انتخاب الشراكة مؤهلا. إذا كانت أي شراكة قد أجرت انتخابات بموجب البند '3' (V) عن أي سنة خاضعة للضريبة وتكون لهذه الشراكة خسارة صافية لهذه السنة أو أي سنة لاحقة من الأدوات المشار إليها في البند (ط)، فإن أحكام الفقرتين '1' و '4' تنطبق على أي سنة من سنوات الخسارة هذه سواء كانت هذه الشراكة صندوقا مؤهلا لهذا العام أم لا. 988 (ج) (1) (ه) '3' تحديد الصندوق المؤهل. لأغراض هذه الفقرة الفرعية، فإن مصطلح & كوت؛ صندوق مؤهل & كوت؛ يعني أي شراكة إذا - في جميع الأوقات خلال السنة الخاضعة للضريبة (وأثناء كل سنة ضريبية سابقة تطبق عليها الانتخابات بموجب البند (الخامس) المطبق)، فإن لهذه الشراكة ما لا يقل عن 20 شريكا ولا يملك أي شريك واحد أكثر من 20 في المائة من مصالح رأس المال أو الأرباح من الشراكة، فإن النشاط الرئيسي لهذه الشراكة لهذه السنة الخاضعة للضريبة (وكل سنة سابقة خاضعة للضريبة) يتكون من شراء وبيع الخيارات أو العقود الآجلة أو الآجلة فيما يتعلق بالسلع الأساسية، فإن 90 في المائة على الأقل من الدخل الإجمالي للشراكة للسنة الخاضعة للضريبة (وكل سنة سابقة خاضعة للضريبة) تتألف من الإيرادات أو المكاسب المبينة في الفقرة الفرعية (ألف) أو (باء) أو (زاي) من المادة 7704 (د) (1) أو ربح من بيع أو التصرف في الأصول الرأسمالية المحتفظ بها لغرض إنتاج الفوائد أو توزيعات الأرباح، فإن ما لا يزيد عن الحد الأدنى من الدخل الإجمالي للشراكة للسنة الخاضعة للضريبة (وكل سنة سابقة خاضعة للضريبة) كان مستمدا من شراء وبيع السلع، و. تسري االنتخابات بموجب هذه الفقرة الفرعية على السنة الخاضعة للضريبة. يتم إجراء الانتخابات بموجب البند (الخامس) عن أي سنة خاضعة للضريبة في أو قبل اليوم الأول من هذه السنة الخاضعة للضريبة (أو، في وقت لاحق، في اليوم الأول أو قبله خلال تلك السنة التي تحتفظ فيها الشراكة بأداة مشار إليها في البند (أنا)). وينطبق أي انتخاب من هذا القبيل على السنة الخاضعة للضريبة التي أجري عليها وجميع السنوات التي خضعت للضريبة، ما لم يلغى بموافقة الأمين. 988 (ج) (1) (ه) '4' معاملة بعض عقود العملات. 988 (c) (1) (E) (إيف) (I) بشكل عام. باستثناء ما هو منصوص عليه في اللوائح، وفي حالة وجود صندوق مؤهل، أو أي عقد من العقود المصرفية، أو أي عقود آجلة بالعملة الأجنبية يتم تداولها بالعملة الأجنبية، أو إلى الحد المنصوص عليه في اللوائح، فإن أي صك مماثل، معاملة القسم 1256 لأغراض القسم 1256. 988 (c) (1) (E) (إيف) (إي) المكاسب والخسائر المعالجة على المدى القصير. في حالة أي صك تعامل كقسم 1256 عقد بموجب الفقرة الفرعية (1)، تطبق الفقرة الفرعية (أ) من المادة 1256 (أ) (3) عن طريق استبدال & كوت؛ 100 في المئة & كوت؛ ل & كوت؛ 40 في المئة & كوت؛ (والفقرة الفرعية (ب) من هذا القسم لا تنطبق). 988 (ج) (1) (ه) '5' القواعد الخاصة للبند '3' 988 (c) (1) (E) (v) (I) بعض الشركاء العامين. لا يعامل مصلحة الشريك العام في الشراكة على أنها غير قادرة على الوفاء بنسبة 20 في المائة من شروط ملكية البند (3) (I) عن أي سنة خاضعة للضريبة من الشراكة إذا، للسنة الخاضعة للضريبة من الشريك الذي (كل شركة تقوم بإيداع عائد موحد مع هذا الشريك) لم يكن لها دخل أو خسارة عادية من معاملة القسم 988 وهي أرباح أو خسائر بالعملة الأجنبية (حسب مقتضى الحال). 988 (c) (1) (E) (v) (إي) معالجة تعويض الحوافز. ولأغراض البند '3' (1)، لا يؤخذ في الاعتبار أي دخل يخصص لشريك عام كتعويض حوافز على أساس الأرباح بدلا من رأس المال عند تحديد مصلحة هذا الشريك في أرباح الشراكة. 988 (ج) (1) (هاء) '5' (ثالثا) معاملة الشركاء المعفيين من الضرائب. وباستثناء ما هو منصوص عليه في اللوائح، لا تعامل مصلحة شريك في الشراكة على أنها غير قادرة على الوفاء بنسبة 20 في المائة من شروط ملكية البند "3" (I) إذا لم يكن أي دخل من هذا الشريك من هذه الشراكة خاضعا (سواء مباشرة أو من خلال كيان واحد أو أكثر). 988 (c) (1) (E) (v) (إيف) لوك-ثرو رول. ولتحديد ما إذا كانت متطلبات البند '3' (1) تفي بشروط أي شراكة، باستثناء الحد المنصوص عليه في اللوائح، تعامل أي مصلحة في هذه الشراكة التي تقيمها شراكة أخرى على أنها محتفظ بها على نحو متناسب من جانب الشركاء في تلك النظم الأخرى شراكة. 988 (ج) (1) (ه) '6' قواعد خاصة أخرى. لأغراض هذه الفقرة الفرعية - 988 (c) (1) (E) (في) (I) ريلاتد بيرسونس. تعامل المصالح في الشراكة التي يعقدها الأشخاص فيما يتعلق ببعضهم البعض (بالمعنى الوارد في المادتين 267 (ب) و 707 (ب)) على أنهما محتجزان من قبل شخص واحد. تتضمن الإشارات إلى أي شراكة إشارة إلى أي سلف لها. 988 (ج) (1) (هاء) '6' (ثالثا) الإنهاءات غير المقصودة. تطبق قواعد مماثلة لقواعد البند 7704 (ه). 988 (ج) (1) (ه) '6' (رابعا) معاملة بعض أدوات الدين. ولأغراض البند '3' (رابعا)، تعامل أي صك دين هو معاملة من بنود القسم 988 كسلعة. 988 (c) (2) تاريخ الحجز. مصطلح & كوت؛ تاريخ الحجز & كوت؛ يعني-- 988 (ج) (2) (ألف) في حالة المعاملة المبينة في الفقرة (1) (ب) '1' أو تاريخ الاقتناء أو الذي يصبح فيه دافعي الضرائب الملتزمين أو. 988 (ج) (2) (باء) في حالة المعاملة المبينة في الفقرة (1) (باء) '2'، التاريخ الذي تراكم فيه أو يؤخذ في الحسبان. 988 (c) (3) تاريخ الدفع. مصطلح & كوت؛ تاريخ الدفع & كوت؛ يعني التاريخ الذي يتم فيه الدفع أو استلامه. 988 (c) (4) أداة الدين. مصطلح & كوت؛ أداة الدين & كوت؛ يعني السند أو السند أو المذكرة أو الشهادة أو أي دليل آخر على المديونية. وإلى الحد المنصوص عليه في اللوائح، يشمل هذا المصطلح الأسهم المفضلة. 988 (c) (5) القواعد الخاصة حيث يأخذ دافعو الضرائب أو يسلمونه. إذا كان دافعي الضرائب يأخذ أو يجعل التسليم فيما يتعلق بأي معاملة القسم 988 الموصوفة في الفقرة (1) (ب) '3'، أي ربح أو خسارة (يتم تحديدها كما لو أن دافعي الضرائب باعوا العقد أو الخيار أو الأداة في التاريخ الذي إذا كان قد تم تسليمه أو تسليمه لقيمته السوقية العادلة في ذلك التاريخ)، بنفس الطريقة التي يتم بها بيع هذا العقد أو الخيار أو الصك. 988 (د) معاملة 988 معاملة تحوط. 988 (د) (1) بشكل عام. إلى الحد المنصوص عليه في اللوائح، إذا كانت أي معاملة في القسم 988 جزء من معاملة التحوط 988، فإن جميع المعاملات التي تشكل جزءا من معاملة التحوط 988 هذه يجب أن تدمج وتعامل معاملة واحدة أو يتم التعامل معها بطريقة متسقة لأغراض هذا العنوان الفرعي. ولأغراض الجملة السابقة، يحدد ما إذا كانت أي معاملة هي معاملة منفردة في القسم 988 دون اعتبار لما إذا كانت هذه المعاملة ستنص على خلاف ذلك على علامة السوق 475 أو 1256 ولا يشمل هذا المصطلح أي معاملة فيما يتعلق ب التي تجرى الانتخابات بموجب الفقرة الفرعية (أ) (1) (باء). لا تنطبق الأقسام 492 و 1092 و 1256 1 على معاملة يغطيها هذا القسم الفرعي. 988 (د) (2) 988 معاملة التحوط. لأغراض الفقرة (1)، فإن مصطلح & كوت؛ 988 معاملة التحوط & كوت؛ يعني أي معاملة - 988 (d) (2) (A) التي يبرمها دافعي الضرائب في المقام الأول - 988 (د) (2) (ألف) '1' لإدارة مخاطر تقلبات أسعار العملات فيما يتعلق بالممتلكات التي يحتفظ بها أو يحتفظ بها دافعي الضرائب، أو. 988 (د) (2) (ألف) '2' لإدارة مخاطر تقلبات أسعار العملات فيما يتعلق بالاقتراضات التي ستقدم أو التي ستقدم، أو الالتزامات التي يتكبدها أو يتحملها دافعو الضرائب، و. 988 (د) (2) (باء) التي حددها الأمين أو دافعي الضرائب باعتبارها معاملة تحوط 988. 988 (ه) التطبيق للأفراد. 988 (ه) (1) بشكل عام .-- لا تسري الأحكام السابقة من هذا القسم على أي صفقة 988 معاملة يدخلها الفرد وهي معاملة شخصية. 988 (ه) (2) الاستبعاد لبعض المعاملات الشخصية .-- 988 (ه) (2) (أ) يتم التصرف في العملة غير الوظيفية من قبل أي فرد في أي معاملة، و. 988 (ه) (2) (باء) هذه المعاملة هي معاملة شخصية، لا يتم الاعتراف بأي ربح لأغراض هذا العنوان الفرعي بسبب التغيرات في أسعار الصرف بعد الحصول على هذه العملة من قبل هذا الفرد وقبل هذا التصرف. ولا تسري الجملة السابقة إذا تجاوز الكسب الذي يمكن الاعتراف به خلاف ذلك في المعاملة 200 دولار. 988 (ه) (3) المعاملات الشخصية .-- ولأغراض هذا القسم الفرعي، يعني مصطلح "معاملة شخصية" أي معاملة يدخل فيها فرد ما، إلا أن هذا المصطلح لا يشمل أي معاملة إلى الحد الذي تستوفي فيه المصروفات المخصصة بشكل مناسب لهذه المعاملة متطلبات - 988 (ه) (3) (ألف) المادة 162 (بخلاف نفقات السفر الموصوفة في البند الفرعي (أ) (2) منه، أو. 988 (ه) (3) (باء)، الفرع 212 (بخلاف ذلك الجزء من الباب 212 الذي يتناول النفقات المتكبدة فيما يتعلق بالضرائب). (الحاشية المضافة L. 99-514، العنوان الثاني عشر، القسم 1261 (أ)، 22 أكتوبر 1986، 100 رقم 2587، وعدلت الحانة L. 100-647، العنوان الأول، القسم 1012 (v) (2) (أ)، (3)، (4)، (6) - (8)، العنوان السادس، القسم 6130 (أ)، (ب)، 10 تشرين الثاني / نوفمبر 1988، 102 رقم 3529، 3717؛ الحاشية L. 101-239، العنوان السابع، القسم 7811 (ط) (7)، 19 ديسمبر 1989، 103 الحاشية 2410؛ الحاشية L. 105-34، العنوان الحادي عشر، القسم 1104 (أ) )، 5 أغسطس 1997، 111 ستات 788؛ الحاشية L. 106-170، العنوان الخامس، القسم 532 (ب)، 17 ديسمبر 1999، 113 ستات 1860.) قانون الإيرادات الداخلية القسم 1256 العقد. القسم 1256 العقد هو أي: 1. عقد العقود الآجلة، 2 - عقد العمالت األجنبية، 4. خيار تاجر الأسهم، أو. 5. الأوراق المالية تاجر العقود الآجلة. 1. ينص على أن المبالغ التي يجب إيداعها أو يمكن سحبها من حساب الهامش الخاص بك تعتمد على ظروف السوق اليومية (نظام وسم إلى السوق)، و. 2. Is traded on, or subject to the rules of, a qualified board of exchange. A qualified board of exchange is a domestic board of trade designated as a contract market by the Commodity Futures Trading Commission, any board of trade or exchange approved by the Secretary of the Treasury, or a national securities exchange registered with the Securities and Exchange Commission. 1. Requires delivery of a foreign currency that has positions traded through regulated futures contracts (or settlement of which depends on the value of that type of foreign currency), 2. Is traded in the interbank market, and. 3. Is entered into at arm's length at a price determined by reference to the price in the interbank market. Internal Revenue Code Sec. 988. Treatment Of Certain Foreign Currency Transactions. ما لم ينص على خلاف ذلك في هذا القسم، فإن أي ربح أو خسارة بالعملة الأجنبية تعزى إلى معاملة القسم 988 يتم احتسابها بشكل منفصل ويتم اعتبارها كإيرادات أو خسائر عادية (حسب مقتضى الحال). Treas. Regulations §1.988-1(a)(7) 1.988-1(a)(7) Special rules for regulated futures contracts and non-equity options-- 1.988-1(a)(7)(i) In general. Except as provided in paragraph (a)(7)(ii) of this section, paragraph (a)(2)(iii) of this section shall not apply to any regulated futures contract or non-equity option which would be marked to market under section 1256 if held on the last day of the taxable year. 1.988-1(a)(7)(ii) Election to have paragraph (a)(2)(iii) of this section apply. Notwithstanding paragraph (a)(7)(i) of this section, a taxpayer may elect to have paragraph (a)(2)(iii) of this section apply to regulated futures contracts and non-equity options as provided in paragraph (a)(7)(iii) and (iv) of this section. 1.988-1(a)(7)(iii) Procedure for making the election. A taxpayer shall make the election provided in paragraph (a)(7)(ii) of this section by sending to the Internal Revenue Service Center , Examination Branch, Stop Number 92, Kansas City, MO 64999 a statement titled "ELECTION TO TREAT REGULATED FUTURES CONTRACTS AND NON-EQUITY OPTIONS AS SECTION 988 TRANSACTIONS UNDER SECTION 988(c)(1)(D)(ii)" that contains the following: 1.988-1(a)(7)(iii)(A) The taxpayer's name, address, and taxpayer identification number; 1.988-1(a)(7)(iii)(B) The date the notice is mailed or otherwise delivered to the Internal Revenue Service Center; 1.988-1(a)(7)(iii)(C) A statement that the taxpayer (including all members of such person's affiliated group as defined in section 1504 or in the case of an individual all persons filing a joint return with such individual) elects to have section 988(c)(1)(D)(i) and section 1.988-1(a)(7)(i) not apply; 1.988-1(a)(7)(iii)(D) The date of the beginning of the taxable year for which the election is being made; 1.988-1(a)(7)(iii)(E) If the election is filed after the first day of the taxable year, a statement regarding whether the taxpayer has previously held a contract described in section 988(c)(1)(D)(i) or section 1.988-1(a)(7)(i) during such taxable year, and if so, the first date during the taxable year on which such contract was held; and. 1.988-1(a)(7)(iii)(F) The signature of the person making the election (in the case of individuals filing a joint return, the signature of all persons filing such return). The election shall be made by the following persons: in the case of an individual, by such individual; in the case of a partnership, by each partner separately ; effective for taxable years beginning after March 17, 1992, in the case of tiered partnerships, each ultimate partner; in the case of an S corporation, by each shareholder separately; in the case of a trust (other than a grantor trust) or estate, by the fiduciary of such trust or estate; in the case of any corporation other than an S corporation, by such corporation (in the case of a corporation that is a member of an affiliated group that files a consolidated return, such election shall be valid and binding only if made by the common parent, as that term is used in section 1.1502-77(a)); in the case of a controlled foreign corporation, by its controlling United States shareholders under section 1.964-1(c)(3). With respect to a corporation (other than an S corporation), the election, when made by the common parent, shall be binding on all members of such corporation's affiliated group as defined in section 1504 that file a consolidated return. The election shall be binding on any income or loss derived from the partner's share (determined under the principles of section 702(a)) of all contracts described in section 988(c)(1)(D)(i) or paragraph (a)(7)(i) of this section in which the taxpayer holds a direct interest or indirect interest through a partnership or S corporation; however, the election shall not apply to any income or loss of a partnership for any taxable year if such partnership made an election under section 988(c)(1)(E)(iii)(V) for such year or any preceding year. Generally, a copy of the election must be attached to the taxpayer's income tax return for the first year it is effective. It is not required to be attached to subsequent returns. However, in the case of a partner, a copy of the election must be attached to the taxpayer's income tax return for every year during which the taxpayer is a partner in a partnership that engages in a transaction that is subject to the election. 1.988-1(a)(7)(iv) Time for making the election-- 1.988-1(a)(7)(iv)(A) In general. Unless the requirements for making a late election described in paragraph (a)(7)(iv)(B) of this section are satisfied, an election under section 988(c)(1)(D)(ii) and paragraph (a)(7)(ii) of this section for any taxable year shall be made on or before the first day of the taxable year or, if later, on or before the first day during such taxable year on which the taxpayer holds a contract described in section 988(c)(1)(D)(ii) and paragraph (a)(7)(ii) of this section. The election under section 988(c)(1)(D)(ii) and paragraph (a)(7)(ii) of this section shall apply to contracts entered into or acquired after October 21, 1988, and held on or after the effective date of the election. The election shall be effective as of the beginning of the taxable year and shall be binding with respect to all succeeding taxable years unless revoked with the prior consent of the Commissioner. In determining whether to grant revocation of the election, recapture of the tax benefit derived from the election in previous taxable years will be considered. A taxpayer may make an election under section 988(c)(1)(D)(ii) and paragraph (a)(7)(ii) of this section within 30 days after the time prescribed in the first sentence of paragraph (a)(7)(iv)(A) of this section. Such a late election shall be effective as of the beginning of the taxable year; however, any losses recognized during the taxable year with respect to contracts described in section 988(c)(1)(D)(ii) or paragraph (a)(7)(ii) of this section which were entered into or acquired after October 21, 1988, and held on or before the date on which the late election is mailed or otherwise delivered to the Internal Revenue Service Center shall not be treated as derived from a section 988 transaction. A late election must comply with the procedures set forth in paragraph (a)(7)(iii) of this section. 1.988-1(a)(7)(v) Transition rule. An election made prior to September 21, 1989 which satisfied the requirements of Notice 88-124, 1988-51 I.R.B. 6, shall be deemed to satisfy the requirements of paragraphs (a)(7)(iii) and (iv) of this section. 1.988-1(a)(7)(vi) General effective date provision. This paragraph (a)(7) shall apply with respect to futures contracts and options entered into or acquired after October 21, 1988. Treas. Regulations §1.988-3 Character of exchange gain or loss. 1.988-3(a) In general. 1.988-3(b)(1) In general. Except as provided in paragraph (b)(2) of this section, a taxpayer may elect, subject to the requirements of paragraph (b)(3) of this section, to treat any gain or loss recognized on a contract described in section 1.988- 2(d)(1) as capital gain or loss, but only if the contract -- If a valid election under this paragraph (b) is made with respect to a section 1256 contract, section 1256 shall govern the character of any gain or loss recognized on such contract. If a contract which is the subject of an election under paragraph (b)(1) of this section becomes part of a straddle within the meaning of section 1092 (c) (without regard to subsections (c)(4) or (e)) after the date of the election, the election shall be invalid with respect to gains from such contract and the Commissioner, in his sole discretion, may invalidate the election with respect to losses. A taxpayer that has made an election under section 1.988-3(b)(3) must attach to his income tax return a statement which sets forth the following: If the taxpayer receives independent verification of the election in paragraph (b)(3) of this section, the taxpayer shall be presumed to have satisfied the requirements of paragraphs (b)(3) and (4) of this section. A contract that is a part of a straddle as defined in section 1092 may not be independently verified and shall be subject to the rules of paragraph (b)(2) of this section. A taxpayer receives independent verification of the election in paragraph (b)(3) of this section if -- INTERNAL REVENUE SERVICE NATIONAL OFFICE FIELD SERVICE ADVICE. MEMORANDUM FOR ASSOCIATE DISTRICT COUNSEL. FROM: DEBORAH A. BUTLER ASSISTANT CHIEF COUNSEL CC:DOM:FS. SUBJECT: Section 1256 Contracts and Section 988 Transactions. 5. If C is viewed as an agent of A, its trading activity may be aggregated with A's activity in determining whether he was a trader or investor. short n' sweet explanation found elsewhere on the web. short n' sweet explanation #2 as suggested by larger hedge funds. Section 988 gain or loss. National Futures Association (NFA) is the industry-wide, self-regulatory organization for the U.S. futures industry. FOREX Education site: IRS Publication 550: Loss transactions . For individuals, a loss transaction is any transaction that results in a deductible loss if the gross amount of the loss is at least $2 million in a single tax year or $4 million in any combination of tax years. A loss from a foreign currency transaction under Internal Revenue Code section 988 is a loss transaction if the gross amount of the loss is at least $50,000 in a single tax year , whether or not the loss flows through from an S corporation or partnership. IRS Publication 334: Reportable transactions . You must file Form 8886 , Reportable Transaction Disclosure Statement, to report certain transactions. You may have to pay a penalty if you are required to file Form 8886 but do not do so. You may also have to pay interest and penalties on any reportable transaction understatements. Reportable transactions include (1) transactions the same as or substantially similar to tax avoidance transactions identified by the IRS, (2) transactions offered to you under conditions of confidentiality for which you paid an advisor a minimum fee, (3) transactions for which you have, or a related party has, contractual protection against disallowance of the tax benefits, (4) transactions that result in losses of at least $2 million in any single tax year ( $50,000 if from certain foreign currency transactions ) or $4 million in any combination of tax years, (5) transactions resulting in book-tax differences of more than $10 million on a gross basis, and (6) transactions with asset holding periods of 45 days or less and that result in a tax credit of more than $250,000. For more information, see the Instructions for Form 8886. IRS Schedule C instructions: Reportable Transaction Disclosure Statement : Use Form 8886 to disclose information for each reportable transaction in which you participated. Form 8886 must be filed for each tax year that your federal income tax liability is affected by your participation in the transaction . You may have to pay a penalty if you are required to file Form 8886 but do not do so. You may also have to pay interest and penalties on any reportable transaction understatements. The following are reportable transactions. Any transaction resulting in a loss of at least $2 million in any single tax year or $4 million in any combination of tax years. (At least $50,000 for a single tax year if the loss arose from a foreign currency transaction defined in section 988(c)(1) , whether or not the loss flows through from an S corporation or partnership.) Any transaction resulting in a book-tax difference of more than $10 million on a gross basis. 1. Reportable transaction disclosure statement. 2. Tax shelter registration number. Use Form 8886 to disclose information for each reportable transaction in which you participated. Generally, you must attach Form 8886 to your return for each year that your tax liability is affected by your participation in the transaction. In addition, for the first year Form 8886 is attached to your return, you must send a copy to: Large & Mid-Size Business Division. 1111 Constitution Avenue, NW. Washington, DC 20224. The following discussion briefly describes reportable transactions. For more details, see the instructions for Form 8886. A reportable transaction is any of the following. • A listed transaction. • A confidential transaction. • A transaction with contractual protection. • Transactions with a brief asset holding period. This category includes transactions that result in your claiming a tax credit (including a foreign tax credit) of more than $250,000 if the asset giving rise to the credit was held by you for 45 days or less. Certain losses (such as losses from casualties, thefts, and condemnations) are excepted from this category and do not have to be reported on Form 8886 (see Form 8886 instructions). For information on other exceptions, see Revenue Procedure 2003-24 in Internal Revenue Bulletin 2003-11. This Internal Revenue Bulletin is available at irs.gov/pub/irs-irbs/irb03-11.pdf. Internal Revenue Code Sec. 988 Tax Shelter. "Notice 2003-81" Tax Shelter. Effective Date: July 26, 2005. Coordinated Issue Paper, All Industries, "Notice 2003-81" Tax Shelter, UIL 9300.31-00. INTRODUCTION. On December 4, 2003, the Service issued Notice 2003-81, 2003-2 C.B. 1223, announcing that it will challenge transactions involving the assignment of offsetting. foreign currency options to a charity in order to claim substantial artificial net losses and identifying these transactions as listed transactions for purposes of I.R.C. §§6011, 6111, and 6112. The transaction is designed to create an overall net loss (either ordinary or capital) when a taxpayer transfers two foreign currency contracts to a charity where only one such contract is subject to the mark-to-market rules contained in I.R.C. §1256. SUMMARY OF CONCLUSIONS. Taxpayers deployed Notice 2003-81 transactions in order to offset substantial taxable income (either capital or ordinary) . Taxpayers initiated the transactions by entering into an investment management agreement and opening a trading account managed by the promoter, who is also a registered investment advisor. Generally, the initial capital investment is determined by the anticipated loss needed. The required investment amount is equal to either (1) 15% of the desired ordinary loss or (2) 10% of the desired capital loss. The taxpayer agrees to leave the funds in the account for a five-year period, although funds can be withdrawn at any time subject to significant monetary penalties. A small portion, approximately 1.75%, of the initial capital investment is used to establish a foreign currency trading account that is used to purchase foreign currency option contracts. The remaining balance is invested in a hedge fund of funds that in turn invests in a variety of investment vehicles including other hedge funds, stock funds, commodity funds and currency funds. The foreign currency "investment" strategy involves the purchase and sale of a series of foreign currency option contracts denominated in both a foreign currency in which positions are traded through regulated futures contracts and a foreign currency that is not traded through regulated futures contracts. The values of the two currencies underlying the options (i) historically have demonstrated a very high positive correlation with one another, or (ii) officially have been linked to one another, such as through the European Exchange Rate Mechanism ("ERM II"). 1 In one version, the taxpayer buys two 180-day European-style digital currency options, pegged to fluctuations in the exchange rate between the U.S. dollar and the euro. These positions are in a foreign currency traded through regulated futures contracts, and thus the taxpayer takes the position that such positions are I.R.C. §1256(g)(2)(A) foreign currency contracts. In the promotional materials, these contracts are referred to as the "major options." At the same time, the taxpayer sells two 180-day European-style digital currency options, pegged to fluctuations in the exchange rate between the U.S. dollar and a stated European currency. The European currency is one in which positions are not traded on a qualified board or exchange and are not I.R.C. §1256(g)(2)(A) foreign currency contracts. In the promotional materials, these contracts are referred to as the "minor options." The counterparty is the same for all four currency contracts. Therefore, the initial cash outlay to enter into the foreign currency positions is limited to the net premium among the offsetting contracts. In a more complex variation of the transaction, the taxpayer enters into a series of 180-day European-style digital options on the same day. Usually, the taxpayer buys two put options and sells two call options pegged to fluctuations in the exchange rate between the U.S. dollar and the euro. This group of options comprises the "major options." The taxpayer also buys two call options and sells two put options, pegged to fluctuations in the exchange rate between the U.S. dollar and a stated European currency. This group of options comprises the "minor options ." Again, the counterparty is the same for all eight currency contracts and the initial cash outlay is relatively small in reference to the stated notional amounts of the contracts. In some deals, the taxpayer will enter into a second series of 180-day European-style options on the following day. The values of the respective currencies underlying the foreign currency transactions historically have demonstrated a very high positive correlation with one another. Therefore, the major options will move inversely to the minor options such that any gain in a major foreign currency position will be largely offset by a corresponding, though not always identical, loss in a minor foreign currency position. The bank, which serves as counterparty for these deals, generally makes representations to the taxpayer and trader concerning the statistical probabilities of the potential rate of return from the option positions indicating a profit is possible but unlikely. In fact, according to the analysis provided by the bank, there is usually a better than 50% chance that the taxpayer will lose its entire investment. C. Assignment of Major and Minor Contract to Charity. Prior to the exercise date, that taxpayer assigns two of its open foreign currency contracts to a charity. The first contract is a major currency option contract that is in a loss position at the time of assignment. The taxpayer also assigns the obligation that is associated with a minor currency option contract that is in a gain position at the time of assignment of the obligation. The taxpayer takes the position that (1) the assignment of the major contract (i.e., I.R.C. §1256 contract) is treated as a termination of the contract requiring recognition of the inherent gain or loss in such contract; and (2) the assignment of the minor contract obligation does not trigger the recognition of income because that contract is not covered by the mark-to-market provisions contained in I.R.C. §1256. D. Reporting of Transaction for Federal Income Tax Purposes. In some cases, the taxpayer will report the listed transaction on Form 4797, Part II , Ordinary Gains and Losses as an I.R.C §988 foreign currency transaction. The loss claimed is a direct result from the disparate reporting of the donated major and minor contracts. The major contract in a loss position and the remaining option contracts that are not assigned to the charity are accounted for on Form 4797. The remaining option contract positions when closed effectively offset one another. The reporting exclusion of the gain from the donated minor contract, which closely mirrors the loss reported from the donated major contract, creates the artificial loss claimed by the taxpayer. In other cases, the taxpayer will report the listed transaction on Schedule D , Capital Gains & خسائر. In these instances, the taxpayer makes an election pursuant to I. R.C. §988(a)(1)(B) and Treas. ريج. §1.988-3(b)(4) to treat its foreign currency contracts as capital assets in order to claim a capital loss. The taxpayer is required to attach a verification statement to its filed return for a valid capital treatment election. DISCUSSION. 1. A taxpayer remains obligated to take into income the premium that it received when it writes a "minor" foreign currency option contract and later transfers the obligation associated with that written option to a charity. Gain and loss on options is accounted for on an open transaction basis. As explained in Notice 2003-81, the justification for open transaction treatment is that the gain or loss on an option cannot be finally accounted for until such time as the option is terminated. Thus, premium income is not recognized until an option is sold or terminated. Rev. Rul. 58-234, 1958-1 C.B. 279, Accord Rev. Rul. 78-182, 1978-1 C.B. 265; Koch vmissioner , 67 T.C. 71 (1976), a cq . 1980-2 C.B. 1. Rev. Rul. 58-234 explains that this is the treatment for the option writer because the option writer assumes a burdensome and continuing obligation, and the transaction therefore stays open without any ascertainable income or gain until the writer's obligation is finally terminated. When the option writer's obligation terminates, the transaction closes, and the option writer must recognize any income or gain attributable to the prior receipt of the option premium. Though each taxpayer's transaction should be evaluated independently, the assignment documents reviewed to date have been three-party arrangements (involving the option writer, holder and charity) that seem to give rise to a novation of the option contracts. Where there is a novation, the option writer's obligation under the minor option contract terminates on the charity's assumption of the written option obligation. However, in other cases where a novation does not occur, the writer of the minor foreign currency option writer may well have a continuing obligation because the writer may be called upon to perform if the charity fails to perform or to reimburse the charity for any losses or expenses it may incur if called upon to perform. If an assumption of the liability by the charity causes the option writer's obligation under the option contract to terminate, then the option writer must recognize gain upon assignment, when the option obligation is assumed. Notice 2003-81. If the assumption does not terminate the option writer's obligation under the option contract, the option writer must recognize the premium when the option writer's obligation under the option contract terminates (other than through an exercise of the option against, and performance by, the option writer). Notice 2003-81. It is generally understood that charities that received these options may have terminated them either contemporaneous with or shortly after the assignments. Even if a novation did not occur to cause premium income to be recognized, there is still no support for the apparent contention that responsibility for recognizing premium income shifts to the charity as a result of the assignment of the obligation on the written option. At least some of the tax promotional materials associated with this shelter transaction suggest that the gain or premium income received by the taxpayer on the written option must be recognized by the charity (but goes untaxed because of its taxexempt status). However, there is no support for this "too good to be true" نتيجة. Rather, the taxpayers and their advisors seem to simply assume that a taxpayer can receive premium income, pass off the obligation associated with having received that premium and not be taxed on the premium. No discussion was found in the materials , including an undated draft shelter memorandum ("Shelter Memorandum"), that explains why the premium received by the taxpayer is not a taxable accession to wealth of the taxpayer. Nor is there any explanation as to how a charity could be taxed on this premium that the charity does not receive. There is some hint in the promotional materials that the promoters may have been seeking to pass off the transfer of the obligation on the written minor option as a "donation." Generally, taxpayers do not recognize gain upon transfer of appreciated property to a qualified charity. See Rev. Rul. 55-138, 1955-1 C.B. 223, modified on other grounds by Rev. Rul. 68-69, 1968-1 C.B. 80. In these challenged transactions, however, property rights were not transferred – only the obligation associated with the out-of-the money (losing) purchased option was transferred. The assumption of an obligation is not a donation of property to which I.R.C. §170 applies. Rather it is a disposition event governed by I.R.C. §1001. Crane v. Commissioner , 331 U.S. 1 (1947). If the assumption of the obligation by the charity also involves the donation of associated property, I.R.C. §1001(b) applies and the transaction is treated as a bargain sale. 2 Treas. ريج. §1.1011-2(a)(3); Ebben v. Commissioner , 783 F.2d 906 (9th Cir. 1986). Thus, to the extent there was a transfer of property along with an associated obligation, the taxpayers were, in general, properly advised in this scheme that their charitable deduction for the donated purchased option rights would be reduced by the amount of liability relief provided by the charity that assumed the obligation on the written minor option. In short, contrary to the advice apparently received by the taxpayers, there is no factual or legal basis for the contention that taxpayers in these shelters shifted the responsibility for recognizing the premium income or gain on the written minor option position to a charity. Rather, the taxpayers only transferred an obligation and must be taxed on the premium that they retain. 3. 2. A taxpayer did not obtain a timing benefit because section 1092 does not permit a taxpayer to recognize loss in advance of gain on the offsetting foreign currency contracts. For several reasons, this foreign currency shelter transaction did not provide a timing benefit to participating taxpayers. As explained in issue 1, the open transaction doctrine deferred a taxpayer's recognition of premium income only until it became possible to finally account for the option transaction. As also indicated, a taxpayer will be required to pick up premium income on the minor option at the same time as loss is allowed on the major option under I.R.C. §1256(c) if there was a novation of the minor option. However, even if a novation did not occur, a taxpayer was still required to recognize income when that taxpayer's secondary obligation under the written minor option contract terminated. That may have occurred in the same tax year as the assignment because the options were short term and are understood to have been closed out by the charities either contemporaneous with or shortly after assignment. However, even if a charity kept open the written option obligation beyond the year of assignment, a taxpayer still would not have obtained an overall timing advantage. As indicated in Notice 2003-81, the purchased major foreign currency option and the written minor foreign currency option are substantially offsetting positions. Consequently, such positions were parts of a straddle subject to I.R.C. §1092. Thus, under I.R.C. §1092, any mark-to-market loss on the contributed major foreign currency option would have been appropriately deferred to the extent of the taxpayer's unrecognized gain on the written minor foreign currency option. 3. The taxpayer's loss is not a bona fide loss allowable under I.R.C. §165. I.R.C . §165(a) provides that there shall be allowed as a deduction any loss sustained during the taxable year and not compensated for by insurance or otherwise. Treas. ريج. §1.165-1(b) provides that to be allowable as a deduction under I.R.C. §165(a), a loss must be evidenced by closed and completed transactions, fixed by identifiable events, and, except as otherwise provided in I.R.C. §165(h) and Treas. ريج. §1.165-11 (relating to disaster losses), actually sustained during the taxable year. تحت I.R.C. §165(b), the amount of the loss from the sale or other disposition of property is the adjusted basis provided in I.R.C. §1011. Treas. ريج. §1.165-1(b) further states that only a bona fide loss is allowable and that substance and not mere form shall govern in determining a deductible loss. See also ACM Partnership v. Commissioner , 157 F.3d 231, 252 (3d Cir. 1998), cert. denied , 526 U.S. 1017 (1999) ["Tax losses . . . which do not correspond to any actual economic losses, do not constitute the type of ‘bona fide' losses that are deductible under the Internal Revenue Code and regulations"]. Section 165(c) provides that, in the case of an individual, the deduction under §165(a) is limited to losses incurred in a trade or business, losses incurred in a transaction entered into for profit, and certain casualty or theft losses. In this case, the taxpayer has suffered no real economic loss because the acquisition and disposition of the offsetting option contracts constitute an economically inconsequential investment, with the taxpayer effectively in the same economic position as prior to the purported investment strategy less fees paid to the promoter. See ACM Partnership v. Commissioner , 157 F.3d at 251-252. Accordingly, the loss is not allowable under I.R.C. §165. I.R.C . §165(c) also disallows the loss for an individual taxpayer. The "loss" in this transaction is not incurred in a trade or business or from a casualty or theft, within the meaning of I.R.C. §165(c)(1) and (3). Therefore, a loss in this transaction is only allowable for an individual if it is incurred in a transaction undertaken for profit. I.R.C. §165(c)(2); Fox v. Commissioner , 82 T.C. 1001 (1984); Smith v. Commissioner , 78 T.C. 350 (1982). For the loss to be allowable, a profit motive must be the taxpayer's primary motive for engaging in the transaction. Fox v. Commissioner , 82 T.C. at 1020-21 [citing Helvering v. National Grocery Co ., 304 U.S. 282, 289 n.5 (1938)]. The taxpayer's potential profit from this transaction, apart from tax savings, is statistically improbable. Moreover, any profit generated would likely be derived from the capital that was invested in the hedge fund of funds rather than the small amount of capital used to acquire the major and minor contracts. In fact, the tax materials distinguish the two investment components by opining that the "possible profits" from the tax-driven currency option trading and the "expected profits" from investing in the hedge funds create sufficient "economic substance". Therefore, it is unlikely that a taxpayer can demonstrate a reasonable expectation to earn more than minimal profit solely from the foreign currency investment strategy described above, apart from tax savings. See Knetsch v. United States , 348 F.2d 932, 938 (Ct. Cl. 1965) [The statutory definition of profit under I.R.C. §165(c)(2) "cannot embrace profit seeking activity in which the only economic gain derived therefrom results from a tax reduction."]. Therefore, the loss is disallowed under I.R.C. §165(c)(2). 4. The taxpayer's loss is limited by the I.R.C. §465 at-risk provisions. I.R.C . §465 generally limits deductions for losses in certain activities to the amount for which the taxpayer is at-risk. In the case of an individual taxpayer, I.R.C. §465 limits the taxpayer's losses to the amount for which the taxpayer is at risk in the activity. I.R.C. §465(a)(1). I.R.C. §465 applies to all activities engaged in by the taxpayer in carrying on a trade or business or for the production of income. I.R.C. §465(c)(3)(A). Under those sections, losses incurred in an activity engaged in by a taxpayer carrying on a trade or business or for the production of income is defined broadly to include "excess of the allowable deductions allocable to the activity over the income received or accrued by the taxpayer during the taxable year from the activity." Lansburgh v. Commissioner , 92 T.C. 448, 454-55 (1989). This interpretation is supported by the legislative history of I.R.C. §465 that provides the at risk limitation applies to losses "regardless of the kind of deductible expenses which contributed to the loss." S. Rept. 94-938, at 48 (1976), 1976-3 C.B. (Vol.3) 86. In this case, I.R.C. §465 applies to the loss stemming from taxpayer's purchase of the foreign currency option contracts. The amount at-risk includes the amount of money and the adjusted basis of any property contributed by the taxpayer to the activity, and any amounts borrowed with respect to the activity to the extent that the taxpayer is personally liable to repay the amount, and to the extent of the fair market value of the taxpayer's interest in property, not used in the activity, pledged as security for the borrowed amount. I.R.C. §465(b)(1) and (2). Amounts protected against loss by nonrecourse financing, guarantees, stop loss agreements, or other similar arrangements, however, are not at-risk. I.R.C. §465(b)(4). The Senate report promulgated in connection with I.R.C. §465 states in pertinent part that "a taxpayer's capital is not ‘at risk' in the business, even as to the equity capital which he has contributed to the extent he is protected against economic loss of all or part of such capital by reason of an agreement or arrangement for compensation or reimbursement to him of any loss which he may suffer." S. Rept. No. 94-938, Pt. I at 49, 94th Cong., 2d Sess. (1976). The at-risk rules in I.R.C. §465 are most commonly applied to cases involving nonrecourse liabilities; however, neither the statutory language nor the legislative history interprets the at-risk rules that narrowly. The legislative history notes that the overall purpose of the at-risk rules is to "prevent a situation where the taxpayer may deduct a loss in excess of his econo mic investment in certain types of activities." S. Rept. No. 938, Pt. I at 48, 94th Cong., 2d Sess. (1976). The legislative history also provides that in evaluating the amount at-risk, it should be assumed that a loss-protection guarantee, repurchase agreement or other loss limiting mechanism will be fully paid to the taxpayer. S. Rep. No. 938, 94th Cong., 2d Sess. 50 n.6 (1976), C.B. 1976-3 at 88. Although the foregoing assumption regarding loss-limiting arrangements does not explicitly claim to interpret I.R.C. §465(b)(4), more than one circuit has found such an interpretation to be reasonable. See e.g., Moser v. Commissioner , 914 F.2d 1040, 1048 (8th Cir. 1990); American Principals Leasing Corp. v. Commissioner , 904 F.2d 477, 482 (9th Cir. 1990) [assuming in both cases that the reference to loss-limiting arrangements in I.R.C. §465 legislative history refers to I.R.C.§465(b)(4)]. I.R.C. §465(b)(4) limits losses to amounts at risk where a transaction is structured, by whatever method, to remove any realistic possibility that the taxpayer will suffer an economic loss. A theoretical possibility of economic loss is insufficient to avoid the suspension of losses. See Levien vmissioner , 103 T.C. 120, 125 (1994). The case law, however, is not in complete accord on this issue. In Emershaw v. Commissioner , 949 F.2d 841, 845 (6th Cir. 1991), the court adopted a worst-case scenario approach and determined that the issue of whether a taxpayer is "at risk" for purposes of I.R.C. §465(b)(4) "must be resolved on the basis of who realistically will be the payor of last resort if the transaction goes sour and the secured property associated with the transaction is not adequate to pay off the debt." quoting Levy v. Commissioner , 91 T.C. 838, 869 (1988). In contrast, the Second, Eighth, Ninth, and Eleventh Circuits look to the underlying economic substance of the arrangements under I.R.C. §465(b)(4). Waters v. Commissioner , 978 F.2d 1310, 1316 (2d Cir. 1992) (citing American Principals Leasing Corp v. United States , 904 F.2d 477, 483 (9th Cir. 1990); Young v. Commissioner , 926 F.2d 1083, 1089 (11th Cir. 1991); Moser v. Commissioner , 914 F.2d at 1048-49. The view, as adopted by these circuits, is that, in determining who has the ultimate liability for an obligation, the economic substance and the commercial realities of the transaction control. See Waters v. Commissioner , 978 F.2d at 1316; Levien v. Commissioner , 103 T.C. 120; Thornock v. Commissioner , 94 T.C. 439, 448 (1990); Bussing v. Commissioner , 89 T.C. 1050, 1057 (1987). To determine whether a taxpayer is protected from ultimate liability, a transaction should be examined to see if it "is structured - by whatever method - to remove any realistic possibility that the taxpayer will suffer an economic loss if the transaction turns out to be unprofitable." American Principals Leasing Corp. v. United States , 904 F.2d at 483; See Young v. Commissioner , 926 F.2d at 1088; Thornock v. Commissioner , 94 T.C. at 448-49; Owens v. United States , 818 F.Supp. 1089, 1097 (E.D. Tenn. 1993); Bussing v. Commissioner , 89 T.C. at 1057-58. "[A] binding contract is not necessary for [I.R.C. §465(b)(4)] to apply." American Principals Leasing Corp. v United States , 904 F.2d at 482-83. In addition, "the substance and commercial realities of the financing arrangements presented . . . by each transaction" should be taken into account under I.R.C. §465(b)(4). Thornock v. Commissioner , 94 T.C. at 449. To avoid the application of I.R.C. §465(b)(4), there must be more than "a theoretical possibility that the taxpayer will suffer economic loss." American Principals Leasing Corp. v United States , 904 F.2d at 483. In the typical "Notice 2003-81" deal, the counterparty to all the foreign currency contracts is the same. Due to the fact that the currency movements between the euro and European currency used in the minor contracts closely parallel each other, the taxpayer's cash investment is relatively small. The transaction is carefully structured so that any gain in one option position is largely offset by a loss in another contract. Therefore, the taxpayer's true at-risk amount equals the net out of pocket premium paid to acquire the aggregate offsetting foreign currency positions. 5. The taxpayer's loss is disallowed because the transaction as a whole lacks economic substance and business purpose apart from tax savings. In addition to the statutory provisions discussed herein, the taxpayer's purported loss may be disallowed under the economic substance doctrine. This approach would deny the tax benefits arising because the transaction does not result in a meaningful change to the taxpayer's economic position other than the manufactured loss that results in the purported reduction in tax. See Knestch v. United States , 364 U.S. 361 (1960). The Tax Court has stated that tax law "requires that the intended transactions have economic substance separate and distinct from economic benefit achieved solely by tax reduction." ACM Partnership v. Commissioner , T.C. Memo. 1997-115, aff'd in part and rev'd in part , 157 F.3d 231 (3rd Cir. 1998). Accordingly, this doctrine is applicable to the typical Notice 2003-81 transaction where the purported tax benefits are unintended by Congress and accomplished by a prearranged deal that serves no economic purpose apart from tax savings. In determining whether a transaction is to be respected for tax purposes, both the objective economic substance of the transaction and the subjective business motivation are considered. ACM Partnership v. Commissioner , 157 F.3d 231, 247 (3d Cir. 1998); Horn v. Commissioner , 968 F.2d 1229, 1237 (D.C. Cir. 1992); Casebeer v. Commissioner , 909 F.2d 1360, 1363 (9th Cir. 1990). Some courts apply a conjunctive analysis that requires a taxpayer to establish the presence of both economic substance (i.e., objective test) and business purpose (i.e., subjective test to determine whether the taxpayer intended the transaction to serve some useful non-tax purpose). See Pasternak v. Commissioner , 990 F.2d 893, 898 (6th Cir. 1993). Other courts apply a less stringent test that either a subjective business purpose or actual economic substance is sufficient. Rice's Toyota World v. Commissioner , 752 F.2d 89, 91-92 (4th Cir. 1985). An alternative analysis views economic substance and business purpose as "simply more precise factors to consider" in determining whether a transaction has any practical economic effects other than the tax benefits created. ACM Partnership v. Commissioner , 157 F.3d at 247. See also Casebeer v. Commissioner , 909 F.2d at 1363; Sacks v. Commissioner , 69 F.3d 982, 985 (9th Cir. 1995); James v. Commissioner , 899 F.2d 905, 908 (10th Cir. 1995). In addition, several courts have applied the economic substance doctrine where a taxpayer was exposed to limited risk and the transaction had a theoretical potential for profit but the profit potential was nominal and insignificant when compared to the tax benefit derived. Gregory v. Helvering , 293 U.S. 465 (1935) [Transaction that is entered into for the primary purposes of creating a loss is subject to special scrutiny to determine whether such loss was bona fide]; Knetsch v. United States , 364 U.S. 361 (1960) [Leveraged acquisition of Treasury bills and accompanying prepaid interest deduction lacked economic substance]; Goldstein v. Commissioner , 364 F.2d 734 739-40 (2d Cir. 1966)[Deduction disallowed even though taxpayer has a possibility of small gain or loss from ownership of Treasury bills]; Sheldon v. Commissioner , 94 T.C. 738, 768 (1990)[Loss disallowed from prearranged substantially offsetting transaction where profit potential "infinitesimally nominal and vastly insignificant" in comparison to loss claimed]; Rice's Toyota World v. Commissioner , 752 F.2d at 94; [Economic substance inquiry requires an objective determination of whether reasonable possibility of profit existed apart from tax benefits]. See also Compaq Computer Corp v. Commissioner , 277 F.3d at 781; IES Industries v. United States , 253 F.3d at 354 [Applying same objective economic substance test discussed in Rice's Toyota World ]. The doctrine of economic substance should be raised in cases where the facts show that the transaction at issue was primarily designed to generate the tax losses, with little if any possibility for profit, and that such was the expectation of all the parties to the transaction. The wide variety of facts required to support its application should be developed at examination. The administrative record should include documents obtained from the taxpayer, the promoter and other third parties; interviews with the same; and expert analysis of financial data and industry practices. Summonses should be promptly issued whenever necessary to obtain the requisite transactional documents. In addition to evidence that shows a lack of pre-tax profit potential, facts should be developed demonstrating that the taxpayer and the promoter primarily planned the transaction for tax purposes. Such evidence should include the following: (1) documents or other evidence that the foreign currency option contracts were sold as tax shelters with limited consideration of the underlying economics of the transaction; and (2) evidence that a prudent investor would not have invested in the strategy but for the tax savings. A primary source of such evidence is correspondence between the promoter and the taxpayer, including, but not limited to, offering memos, letters identifying tax goals, e -mails and in-house communications at the offices of the promoter and any other third party involved in the strategy. Written correspondence is the best evidence, but evidence of oral communications regarding tax goals is also useful. Indirect sources of the same include correlations between tax losses generated and tax losses requested, and between the taxpayer's income and the tax losses generated, particularly if it can be shown that the income to be sheltered was attributable to an unusual windfall, like the liquidation of stock options, or sale of a business. Demonstrations of similarities of the nature and extent of tax losses acquired by other clients of the promoter in this shelter can be very important as well. In the typical case, the transaction fails both prongs of the economic substance analysis. The following facts underscore a lack of a legitimate potential or realistic possibility for a pre-tax profit (i.e objective prong): First, the taxpayer's profit potential from the aggregate foreign currency options is severely limited by the offsetting nature of the respective contracts. Although not a traditional straddle, the option contracts create substantially offsetting positions whereby any gain in one contract is offset in another contract. Second, the profit, if any, would be derived from the contractual provision that required a payment equal to twice the premium amount to the holder if the strike price was at or above a stated amount on the exercise date. Third, the net premium paid to enter the option contracts is a mere 1.75% of the actual loss claimed. Fourth, any potential profit realized would be further reduced by significant up -front transaction costs. The fees paid to the promoter were 5% for a capital loss or 6% for any ordinary loss desired. Fifth, the only true profit potential comes from the additional hedge fund investment that represents a distinct investment separate from the foreign currency scheme. This "real" investment, which was a prerequisite to obtaining the desired loss, provides the trappings of legitimacy and creates the illusion of profit when aggregated with the tax shelter investment. These facts persuasively demonstrate the lack of any realistic potential for pre-tax profit from the foreign currency strategy. The transaction also fails the subjective economic substance prong. Typically, the taxpayer has significant taxable income (either capital gain income or ordinary income) unrelated to the transaction. Through participation in this transaction, the taxpayer is able to choose the character and amount of the loss needed to offset the unrelated income. The close connection between the taxable income being sheltered and the claimed loss suggests that the taxpayer did not enter into this transaction for a business purpose. As the Tenth Circuit has recognized, "correlation of losses to tax needs coupled with a general indifference to, or absence of, economic profits may reflect a lack of economic substance." Keeler v. Commissioner , 243 F.3d 1212, 1218 (10th Cir. 2001), citing Freytag v. Commissioner , 89 T.C. 849, 877-878 (1987). Here, the taxpayer does not have a substantial non-tax purpose for entering into the structured transaction other than the creation of an artificial tax loss. If the revenue agent, after consultation with Financial Products specialist and/or economist, determines that it is appropriate to assert economic substance with respect to a specific transaction, consideration must be given to possible appellate venue. As discussed herein, various circuits apply different standards in determining whether a transaction lacks economic substance. Prior to asserting economic substance, the examiner should consult with local Counsel to determine the appropriate standard in their jurisdiction. In cases where a taxpayer who invested in the transaction is unable to establish that (1) the transaction changes in a meaningful way (apart from Federal income tax consequences) the taxpayer's economic position and (2) that the taxpayer has a substantial non-tax purposes for entering into such transaction and the transaction is a reasonable means of accomplishing such purpose the tax benefits, fees or expenses, related thereto, may be disallowed. 6. The taxpayer is not entitled to an ordinary loss under I.R.C. §988. I.R.C . §§985-989, which were enacted as part of the Tax Reform Act of 1986, set forth a comprehensive set of rules for the treatment of foreign currency transactions. In general, I.R.C. §988(a)(1)(A) provides that foreign currency gain or loss attributable to an I.R.C. §988 transaction is computed separately and treated as ordinary income or loss. The I.R.C. §988 foreign currency transaction rules generally apply to forward contracts, futures contracts, options contracts and similar financial instruments. The legislative history of I.R.C. §§985-989 suggests a consistent concern about tax motivated transactions. The Senate Finance Committee Report accompanying the Tax Reform Act of 1986 stated that one of the two reasons I.R.C. §§985-989 were enacted was prior law provided opportunities for tax motivated transactions. S. Rep. No. 313., 99th Cong., 2d Sess. 450 (1986). Accordingly, in enacting I.R.C. §§985-989, Congress granted broad authority for the Service to promulgate regulations "as may be necessary or appropriate to carry out the purposes of [I.R.C. §§985-989]. . . ." I.R.C. §989(c). The legislative history to the TAMRA, in discussing the law prior to the enactment of TAMRA, stated that "[t]he Secretary has general authority to provide the regulations necessary or appropriate to carry out the purposes of new subpart J. For example, the Secretary may prescribe regulations appropriately recharacterizing transactions to harmonize the general realization and recognition provisions of the Code with the policies of §988." H.R. Rep. No. 795, 100th Cong., 2d Sess. 296 (1988); S. Rep. No. 445, 100th Cong., 2d Sess. 311 (1988) (containing identical language). In response to Congressional concern about tax motivated transactions, the Service, under the authority of I.R.C. §989(c), promulgated Treas. ريج. §1.988-2(f) and Treas. ريج. §1.988-1(a)(11). Treas. ريج. §1.988-2(f) states that if the substance of a transaction differs from its form, the Commissioner may recharacterize the timing, source, and character of gains or losses with respect to the transaction in accordance with the substance of the transaction. Treas. ريج. §1.988-1(a)(11) states, in relevant part, that the Commissioner may exclude a transaction or series of transactions which in form is an I.R.C. §988 transaction from the provisions of I.R.C. §988 if the substance of the transaction, or series of transactions indicates that it is not properly considered an I.R.C. §988 transaction. In this case, the transaction at issue may be recharacterized in accordance with its substance so that the taxpayer is required to take i nto account gain as well as the economically corresponding loss under Treas. ريج. §1.988-2(f). For purposes of I.R.C. §988, the Service may adjust the timing of the transaction at issue consistently with its substance and require the taxpayer to recognize gain upon the transfer of the minor contract to the charity on the date of such transfer. The taxpayer's ordinary loss as reported on its return does not reflect the substance of the transaction because the Investor is not economically exposed to fluctuations in the values of the foreign currency positions. The claimed loss is not the result of exposure to exchange rate fluctuations, but rather of differences in timing of recognition of economically offsetting gain and loss positions in an engineered transaction. Accordingly, under Treas. ريج. §1.988-2(f), the taxpayer is required to take both gain and loss into account consistently. Alternatively, the loss may be excluded from I.R.C. §988 under Treas. ريج. §1.988-1(a)(11) because the reported loss is due to the different reporting methods of the major and minor contracts and does not reflect changes in foreign currency exchange rates. Excluding the transaction from the provisions of I.R.C. §988 under this alternative approach, however, would result in capital loss treatment. Barnes Group v. United States , 697 F. Supp 591 (D. Conn. 1988). 7. The 20 percent accuracy-related penalty under I.R.C. §6662 should be asserted against a taxpayer entering into this transaction unless the taxpayer is able to establish reasonable cause and good faith under I.R.C. §6664(c)(1) and applicable regulations. I.R.C . §6662 4 imposes an accuracy-related penalty in an amount equal to 20 percent of the portion of an underpayment attributable to, among other things: (1) negligence or disregard of rules or regulations and (2) any substantial understatement of income tax. Treas. ريج. §1.6662- 2(c) provides that there is no stacking of the accuracy-related penalty components. Thus, the maximum accuracy-related penalty imposed on any portion of an underpayment is 20 percent (40 percent for gross valuation misstatements), even if that portion of the underpayment is attributable to more than one type of misconduct. See D.H.L. Corp. v. Commissioner , T.C. Memo. 1998-461, aff'd in part and rev'd on other grounds , remanded by 285 F.3d 1210 (9th Cir. 2002). In order to facilitate the examiner's review of the relevant facts and circumstances associated with application of the I.R.C. §6662 penalty, this paper first provides a general overview of the law associated with the penalty where there is (a) negligence or disregard of rules or regulations and (b) any substantial understatement of income tax. After the general overview, some more practical suggestions are offered based on the information that has been reviewed to date – including the above -referenced shelter promotion materials and Shelter Memorandum. Much of the focus in that later discussion is on substantial understatement. Negligence or Disregard of Rules or Regulations. Negligence under I.R.C. §6662 includes any failure to make a reasonable attempt to comply with the provisions of the Internal Revenue Code or to exercise ordinary and reasonable care in the preparation of a tax return. انظر I.R.C. §6662(c) and Treas. ريج. §1.6662-3(b)(1). Negligence also includes the failure to do what a reasonable and ordinarily prudent person would do under the same circumstances. See Marcello v. Commissioner , 380 F.2d 499, 506 (5th Cir. 1967), aff'g 43 T.C. 168 (1964); Neely v. Commissioner , 85 T.C. 934, 947 (1985). Treas. ريج. §1.6662-3(b)(1)(ii) provides that negligence is strongly indicated where a taxpayer fails to make a reasonable attempt to ascertain the correctness of a deduction, credit or exclusion on a return that would seem to a reasonable and prudent person to be "too good to be true" under the circumstances. A return position that has a reasonable basis as defined in Treas. ريج. §1.6662-3(b)(3) is not attributable to negligence. Treas. ريج. §1.6662-3(b)(1). "Disregard of rules and regulations" includes any careless, reckless, or intentional disregard of rules and regulations. A disregard of rules or regulations is "careless" if the taxpayer does not exercise reasonable diligence in determining the correctness of a position taken on its return that is contrary to the rule or regulation. A disregard is "reckless" if the taxpayer makes little or no effort to determine whether a rule or regulation exists, under circumstances demonstrating a substantial deviation from the standard of conduct observed by a reasonable person. Additionally, a disregard of the rules and regulations is "intentional" where the taxpayer has knowledge of the rule or regulation that it disregards. Treas. ريج. §1.6662-3(b)(2). The term "rules and regulations" includes the provisions of the Internal Revenue Code, temporary or final treasury regulations, and revenue rulings or notices (other than notices of proposed rulemaking) issued by the Internal Revenue Service and published in the Internal Revenue Bulletin. Treas. ريج. §1.6662-3(b)(2). Therefore, if the facts indicate that a taxpayer took a return position contrary to any published notice or revenue ruling, the taxpayer may be subject to the accuracy-related penalty for an underpayment attributable to disregard of rules and regulations, if the return position was taken subsequent to the issuance of the notice or revenue ruling. The accuracy-related penalty for disregard of rules and regulations will not be imposed on any portion of underpayment due to a position contrary to rules and regulations if: (1) the position is disclosed on a properly completed Form 8275 or Form 8275-R (the latter is used for a position contrary to regulations) and (2) in the case of a position contrary to a regulation, the position represents a good faith challenge to the validity of a regulation. 5 Treas. ريج. §1.6662-3(c). This adequate disclosure exception applies only if the taxpayer has a reasonable basis for the position and keeps adequate records to substantiate items correctly. Treas. ريج. §1.6662-3(c)(1). Moreover, a taxpayer who takes a position contrary to a revenue ruling or a notice has not disregarded the ruling or notice if the contrary position has a realistic possibility of being sustained on its merits. Treas. ريج. §1.6662-3(b)(2). The taxpayer has the ultimate burden of overcoming the presumption that the Service's determination of negligence is correct. Marcello v. Commissioner , 380 F.2d 499, 507 (5th Cir. 1967). With respect to examinations commencing after July 22, 1998, however, the Service must first meet the burden of production with respect to negligence. I.R.C. §7491(c); Higbee v. Commissioner , 116 T.C. 438, 446 (2002). Substantial Understatement. A substantial understatement of income tax exists for a taxable year if the amount of the understatement exceeds the greater of 10 percent of the tax required to be shown on the return or $5,000 ($10,000 for a corporation, other than an S corporation or a personal holding company). I.R.C. §6662(d)(1). Specific rules apply to the calculation of the understatement when any portion of the understatement arises from an item attributable to a tax shelter. For purposes of I.R.C. §6662(d)(2)(C), a tax shelter is a partnership or other entity, an investment plan or arrangement, or other plan or arrangement where a significant purpose of such partnership, entity, plan or arrangement is the avoidance or evasion of federal income tax. I.R.C. §6662(d)(2)(C)(iii). Because a significant purpose of the Notice 2003-81 transaction is tax avoidance, it is a tax shelter pursuant to I.R.C. §6662(d)(2)(C). Different rules, however, apply depending upon whether the taxpayer is a corporation or an individual or entity other than a corporation. In the case of any item of a taxpayer other than a corporation, which is attributable to a tax shelter, understatements are generally reduced by the portion of the understatement attributable to: (1) the tax treatment of items for which there was substantial autho rity for such treatment, and (2) the taxpayer reasonably believed that the tax treatment of the item was more likely than not the proper treatment. I.R.C. §6662(d)(2)(C)(i). 6 The substantial authority standard is an objective standard involving an analysis of the law and application of the law to relevant facts. Treas. ريج. §1.6662-4(d)(1). Here, there was no substantial authority for the tax treatment of this transaction. A taxpayer is considered to have reasonably believed that the tax treatment of an item is more likely than not the proper tax treatment if (1) the taxpayer analyzes the pertinent facts and authorities, and based on that analysis reasonably concludes, in good faith, that there is a greater than 50% likelihood that the tax treatment of the item will be upheld if the Service challenges it, or (2) the taxpayer reasonably relies, in good faith, on the opinion of a professional tax advisor, which clearly states (based on the advisor's analysis of the pertinent facts and authorities) that the advisor concludes there is a greater than 50% likelihood the tax treatment of the item will be upheld if the Service challenges it. Treas. ريج. §1.6662-4(g)(4). However, a taxpayer cannot claim to have reasonably relied in good faith on the opinion of a professional tax advisor if the requirements of Treas. ريج. §1.6664-4(c)(1) are not met. Treas. ريج. §1.6662-4(g)(4)(ii). (As a practical matter, the requirement that the opinion take into account the particular motivations and circumstances of the taxpayer makes reliance on a "canned" opinion inherently questionable.) This is discussed further under "Reasonable Cause Exception" below. If the item is attributable to a tax shelter and the taxpayer is a corporation, the understatement cannot be reduced. 7 I.R.C. §6662(d)(2)(C)(ii). Therefore, if a corporate taxpayer has a substantial understatement that is attributable to a tax shelter item, the accuracy related penalty applies to the underpayment arising from the understatement unless the reasonable cause and good faith exception applies. Reasonable Cause Exception. I.R.C . §6664(c) provides an exception, applicable to all types of taxpayers, to the imposition of any accuracy-related penalty if the taxpayer shows that there was reasonable cause and the taxpayer acted in good faith. Special rules apply to items of a corporation attributable to a tax shelter resulting in a substantial understatement. The determination of whether the taxpayer acted with reasonable cause and in good faith is made on a case-by-case basis, taking into account all relevant facts and circumstances. راجع ترياس. ريج. §1.6664-4(b)(1) and Treas. ريج. §1.6664-4(f)(1). All relevant facts, including the nature of the tax investment, the complexity of the tax issues, issues of independence of a tax advisor, the competence of a tax advisor, the. sophistication of the taxpayer, and the quality of an opinion, must be developed to determine whether the taxpayer was reasonable and acted in good faith. Generally, the most important factor in determining whether the taxpayer has reasonable cause and acted in good faith is the extent of the taxpayer's effort to assess the proper tax liability. راجع ترياس. ريج. §1.6664-4(b)(1); see also Larson v. Commissioner , T.C. Memo. 2002-295; Estate of Simplot v. Commissioner , 112 T.C. 130, 183 (1999) (citing Mandelbaum v. Commissioner , T.C. Memo. 1995-255), rev'd on other grounds , 249 F.3d 1191 (9th Cir. 2001). For example, reliance on erroneous information reported on an information return indicates reasonable cause and good faith, provided that the taxpayer did not know or have reason to know that the information was incorrect. Similarly, an isolated computational or transcription error is not inconsistent with reasonable cause and good faith. Treas. ريج. §1.6664-4(b)(1). Circumstances that may suggest reasonable cause and good faith include an honest misunderstanding of fact or law that is reasonable in light of the facts, including the experience, knowledge, sophistication and education of the taxpayer. Treas. ريج. §1.6664-4(b)(1). The taxpayer's mental and physical condition, as well as sophistication with respect to the tax laws, at the time the return was filed, are relevant in deciding whether the taxpayer acted with reasonable cause. See Kees v. Commissioner , T.C. Memo. 1999-41. If the taxpayer is misguided, unsophisticated in tax law, and acts in good faith, a penalty is not warranted. See Collins v. Commissioner , 857 F.2d 1383, 1386 (9th Cir. 1988); راجع Spears v. Commissioner, T.C. Memo. 1996-341, aff'd, 98-1 USTC ¶ 50,108 (2d Cir. 1997)[Court was unconvinced by the claim of highly sophisticated, able, and successful investors that they acted reasonably in failing to inquire about their investment and simply relying on offering circulars and accountant, despite warnings in offering materials and explanations by accountant about limitations of accountant's investigation]. Reliance upon a tax opinion provided by a professional tax advisor may serve as a basis for the reasonable cause and good faith exception to the accuracy-related penalty. The reliance, however, must be objectively reasonable, as discussed more fully below. For example, the taxpayer must supply the professional with all the necessary information to assess the tax matter. The advice also must be based upon all pertinent facts and circumstances and the law as it relates to those facts and circumstances. The advice must not be based on unreasonable factual or legal assumptions (including assumptions as to future events) and must not unreasonably rely on the representations, statements, findings, or agreements of the taxpayer or any other person. For example, the advice must not be based upon a representation or assumption which the taxpayer knows, or has reason to know, is unlikely to be true, such as an inaccurate representation or assumption as to the taxpayer's purposes for entering into a transaction or for structuring a transaction in a particular manner. راجع ترياس. ريج. §1.6664-4(c)(1)(ii). In Long Term Capital Holdings v. United States , 330 F. Supp.2d 122 (D. Conn. 2004), the court concluded that a legal opinion did not provide a taxpayer with reasonable cause where (1) the taxpayer did not receive the written opinion prior to filing its tax return, and the record did not establish the taxpayer's receipt of an earlier oral opinion upon which it would have been reasonable to rely; (2) the opinion was based upon unreasonable assumptions; (3) the opinion did not adequately analyze the applicable law; and (4) the taxpayer's partners did not adequately review the opinion to determine whether it would be reasonable to rely on it. In addition, the court concluded that the taxpayer's lack of good faith was evidenced by its decision to attempt to conceal the losses reported from the transaction by netting them against gains on its return. Where a tax benefit depends on nontax factors, the taxpayer has a duty to investigate the underlying factors rather than simply relying on statements of another person, such as a promoter. See Novinger v. Commissioner , T.C. Memo. 1991-289. Further, if the tax advisor is not versed in these nontax matters, mere reliance on the tax advisor does not suffice. See Addington v. United States , 205 F.3d 54, 58 (2d Cir. 2000); Collins v. Commissioner , 857 F.2d 1383, 1386 (9th Cir. 1988) Freytag v. Commissioner , 89 T.C. 849, 888 (1987), aff'd,904 F.2d 1011 (5th Cir. 1990). Although a professional tax advisor's lack of independence is not alone a basis for rejecting a taxpayer's claim of reasonable cause and good faith, the fact that a taxpayer knew or should have known of the advisor's lack of independence is strong evidence that the taxpayer may not have relied in good faith upon the advisor's opinion. See Neonatology Associates, P.A. v. Commissioner , 115 T.C. 43, 98 (2001), aff'd 299 F.3d 221 (3rd Cir. 2002) ["Reliance may be unreasonable when it is placed upon insiders, promoters, or their offering materials, or when the person relied upon has an inherent conflict of interest that the taxpayer knew or should have known about"]; Goldman v. Commissioner , 39 F.3d 402, 408 (2d Cir. 1994) aff'g T.C. Memo. 1993-480 ["Appellants cannot reasonably rely for professional advice on someone they know to be burdened with an inherent conflict of interest"]; Marine v. Commissioner , 92 T.C. 958, 992-93 (1989), aff'd without published opinion, 921 F.2d 280 (9th Cir. 1991). Such reliance is especially unreasonable when the advice would seem to a reasonable person to be "too good to be true." Pasternak v. Commissioner , 990 F.2d 893, 903 (6th Cir. 1993), aff'g Donahue v. Commissioner , T.C. Memo. 1991-181; Gale v. Commissioner , T.C. Memo. 2002-54; Elliot v. Commissioner , 90 T.C. 960, 974 (1988), aff'd without published opinion , 899 F.2d 18 (9th Cir. 1990); Treas. ريج. §1.6662-3(b)(2). Similarly, the fact that a taxpayer consulted an independent tax advisor is not, standing alone, conclusive evidence of reasonable cause and good faith if additional facts suggest that the advice is not dependable. Edwards v. Commissioner , T.C. Memo. 2002-169; Spears v. Commissioner , T.C. Memo. 1996-341, aff'd, 98-1 USTC ¶ 50,108 (2d Cir. 1997). For example, a taxpayer may not rely on an independent tax adviser if the taxpayer knew or should have known that the tax adviser lacked sufficient expertise, the taxpayer did not provide the advisor with all necessary information, or the information the advisor was provided was not accurate." Baldwin v. Commissioner , T.C. Memo. 2002- 162; Spears v. Commissioner , T.C. Memo. 1996-341, aff'd, 98-1 USTC ¶ 50,108 (2d Cir. 1997). Observations Regarding Application of Penalty to This Shelter. When it appears that imposing the accuracy-related penalty is warranted, the examiner needs to carefully evaluate the application of the penalty for each taxpayer that is audited. This review is made somewhat easier by the fact that taxpayers must satisfy more stringent standards to avoid application of the penalty where the substantial understatement is in connection with a tax shelter transaction. From a practical standpoint, it will be critical for the examiner to focus upon whether the taxpayer based its return position on a more likely than not legal opinion of a professional tax advisor that considered all pertinent facts and lines of legal authority. Based on the review of the limited materials gathered to date in connection with this shelter transaction, it may be quite difficult for taxpayers to show that they satisfied that standard. As an initial matter, the examiner should determine whether the taxpayer obtained or relied upon a signed and dated legal opinion that unambiguously concludes that the taxpayer's return positions were more likely than not to be sustained if challenged. If the taxpayer has not reasonably relied on such an opinion, then the accuracy-related penalty should be asserted. Moreover, while all facts would still have to be considered, the accuracy-related penalty should also apply if the taxpayer simply relied on a "canned" legal opinion that does not address that taxpayer's particular circumstances. Almost by definition, such a "canned opinion could not be reasonably relied upon because it would not address the taxpayer's particular motivations and other pertinent circumstances. Even if the taxpayer could have reasonably relied on a "canned" legal opinion or one that is directed to the taxpayer, it will be necessary to evaluate whether the opinion took into account all pertinent facts and lines of legal authority. If the draft Shelter Memorandum is a good barometer of the quality of the opinions, if any, provided to taxpayers, the examiner may find that highly pertinent facts were overlooked or misstated. For instance, it is plainly troubling that the draft Shelter Memorandum reached its conclusions regarding section 1092 by assuming that the assigned foreign currency options were not substantially offsetting positions even though separate promotional documents clearly tout the positions as being almost completely offsetting. Moreover, the legal memorandum virtually ignores all discussion of the economics and legal effects of the assignments. In addition, it will be critical to examine whether the legal opinion addressed all relevant lines of legal authority. As a guide, the examiner should determine if each of the legal issues raised in this CIP were meaningfully considered. The draft Shelter Memorandum was clearly deficient in that regard. For instance, the legal memorandum failed to consider any authority that addresses the tax accounting for options and failed to consider whether the form of assignment caused gain or loss to be recognized under the open transaction doctrine. Though section 988 was considered, the draft memorandum also failed to consider the anti-abuse rules of Treas. ريج. 1.988-2(f). 8. The agent examining the taxable entity should forward all information. gathered about the involvement of the charity to the Exempt Organizations Division of TEGE through the process established by the Notice 2003-81 Issue Management Team. Through IDRs and otherwise, the agent examining a taxable entity that entered into one of these transactions will obtain information about the involvement of the charity. In all cases, the agent should forward that information to the Exempt Organizations Division of TEGE through the process established by the Notice 2003-81 Issue Management Team. Examiners should refer to the Notice 2003-81 toolkit for the most current EO contact information, including contact person, address, phone and fax numbers. Information provided by the examiners to Exempt Organizations will be helpful in alerting Examination and Determination Agents so they may identify issues and take appropriate actions. Exempt Organizations will need to exercise discretion in determining how to proceed with the information that it receives because the nature of the charity's involvement in these transactions may vary. In some cases, a "charity" may have been created by the promoter or someone affiliated with the promoter specifically to facilitate these transactions. The custom-made charity may purport to engage in appropriate charitable activities, but evidence could show substantial and/or repeated involvement as the accommodation party in the transaction. Other cases may involve charities that are well-established in their appropriate charitable endeavors but that appear as accommodation parties in these or other abusive tax transactions. Their involvement may appear on the books simply as a donation, as a net donation from offsetting options or property, or as part of an investment portfolio. The Service will apply the full array of enforcement tools to those entities whose focus is on accommodating abusive tax transactions. Playing that role does not further a charitable or other tax-exempt purpose. If this role is apparent in the application process for exemption, the Service will not recognize the entity as exempt. If the Service discovers this abusive behavior after having already recognized the entity as exempt, the Service will move to revoke the entity's exemption, possibly back to its inception. Where the Service learns that an otherwise compliant charity has become involved in an abusive transaction as an accommodating party, whether booked as a donation, fee, investment, or otherwise, the charity may expect to be contacted by the Service. The charity may be requested to provide the details of its involvement, information about the transaction and other parties, etc. Depending on the circumstances, this contact may be made by the Exempt Organizations Division as a compliance check with respect to the Form 990 or other return, or as part of an inquiry into the charity's own taxation and exemption status or other associated tax issues. In the alternative, it may arise as a third-party request for information relating to the examination of a promoter or taxable party. Prior to any contact being made to charity, coordination must first be made with the Exempt Organizations Division. While these transactions, at a minimum, raise questions about an organization's governance, if significant levels or types of involvement come to light, the Service will take the tax-exempt entity's involvement into account in determining whether to continue to recognize the entity's exemption or to apply an appropriate tax. _____FOOTNOTES_____. Part III - Administrative, Procedural and Miscellaneous. Tax Avoidance Using Offsetting Foreign Currency Option Contracts. The Internal Revenue Service and the Treasury Department are aware of a type of transaction, described below, in which a taxpayer claims a loss upon the assignment of a section 1256 contract to a charity but fails to report the recognition of gain when the taxpayer's obligation under an offsetting non-section 1256 contract terminates. This notice alerts taxpayers and their representatives that these transactions are tax avoidance transactions and identifies these transactions, and those that are substantially similar to these transactions, as listed transactions for purposes of §1.6011-4(b)(2) of the Income Tax Regulations and §§301.6111-2(b)(2) and 301.6112-1(b)(2) of the Procedure and Administration Regulations. This notice also alerts parties involved with these transactions of certain responsibilities that may arise from their involvement with these transactions. A taxpayer pays premiums to purchase a call option and a put option (the purchased options) on a foreign currency. The following sentence is an erroneous conclusion of law. The currency is one in which positions are traded through regulated futures contracts, and the purchased options, therefore, are foreign currency contracts within the meaning of section 1256(g)(2)(A) of the Internal Revenue Code and section 1256 contracts within the meaning of section 1256(b). This sentence should have stated: The taxpayer takes the position that the purchased options are foreign currency contracts within the meaning of §1256(g)(2)(A) of the Internal Revenue Code and §1256 contracts within the meaning of §1256(b). The purchased options are reasonably expected to move inversely in value to one another over a relevant range, thus ensuring that, as the value of the underlying foreign currency changes, the taxpayer will hold a loss position in one of the two section 1256 contracts. The taxpayer also receives premiums for writing a call option and a put option (the written options) on a different foreign currency in which positions are not traded through regulated futures contracts. Thus, the written options are not foreign currency contracts within the meaning of section 1256(g)(2)(A), nor are they section 1256 contracts within the meaning of section 1256(b). The written options are reasonably expected to move inversely in value to one another over a relevant range, thus ensuring that, as the value of the underlying foreign currency changes, the taxpayer will hold a gain position in one of the two non-section 1256 contracts. The values of the two currencies underlying the purchased and written options (i) historically have demonstrated a very high positive correlation with one another, or (ii) officially have been linked to one another, such as through the European Exchange Rate Mechanism (ERM II). Thus, as the currencies change in value, the taxpayer reasonably expects to have the following potential gains and losses in substantially offsetting positions: (1) a loss in a purchased option and a gain in a written option; and (2) a gain in a purchased option and a loss in a written option. At any time, the taxpayer's loss in the purchased option position that has declined in value may be more or less than the taxpayer's gain in the offsetting written option position that has appreciated in value. Similarly, the taxpayer's gain in the remaining purchased option position may be more or less than the taxpayer's loss in the remaining written option position. A material pre-tax profit or rate of return, or both, on the transaction is possible but unlikely. The taxpayer assigns to a charity the purchased option that has a loss. The charity also assumes the taxpayer's obligation under the offsetting written option that has a gain. As with all written options, the amount of gain on the option is limited to the premium received for the option. In the same tax year, the taxpayer may dispose of the remaining purchased option and offsetting written option. Because the purchased option assigned to the charity is a section 1256 contract, the taxpayer relies on section 1256(c) and Greene v. United States , 79 F.3d 1348 (2d Cir. 1996), to mark to market the purchased option when the option is assigned to the charity and to recognize a loss at that time. In contrast, because the assumed written option is not a section 1256 contract, the taxpayer claims not to recognize gain attributable to the option premium. Specifically, the taxpayer claims that the charity's assumption of the option obligation does not cause the taxpayer to recognize gain and that the taxpayer also does not recognize gain either at the time the option expires or terminates or at any other time. Rev. Rul. 58-234, 1958-1 C.B. 279, clarified by Rev. Rul. 68-151, 1968-1 C.B. 363, holds that an option writer does not recognize income or gain with respect to a premium received for writing an option until the option is terminated, without exercise, or otherwise. Accord Rev. Rul. 78-182, 1978-1 C.B. 265; Koch v. Commissioner , 67 T.C. 71 (1976), acq . 1980-2 C.B. 1. Rev. Rul. 58-234 explains that this is the treatment for the option writer because the option writer assumes a burdensome and continuing obligation, and the transaction therefore stays open without any ascertainable income or gain until the writer's obligation is finally terminated. When the option writer's obligation terminates, the transaction closes, and the option writer must recognize any income or gain attributable to the prior receipt of the option premium. In some cases, the option writer's obligation under the option contract may terminate on the charity's assumption of the written option obligation. In other cases, the writer will have a continuing obligation because the writer may be called upon to perform if the charity fails to perform or to reimburse the charity for any losses or expenses it may incur if called upon to perform. If an assumption terminates the option writer's obligation under the option contract, the option writer must recognize gain when the option obligation is assumed. If the assumption does not terminate the option writer's obligation under the option contract, the option writer must recognize the premium when the option writer's obligation under the option contract terminates (other than through an exercise of the option against, and performance by, the option writer). These general principles remain applicable even if the assumption of the option writer's obligation is part of what the taxpayer claims is a donative transaction. Cf . Diedrich v. Commissioner , 457 U.S. 191 (1982) (noting that if a donee pays a gift tax obligation arising from a donative transfer, the donative nature of the transaction does not preclude income recognition by the donor on the obligation assumed). Here, the taxpayer has made a transfer to the charity of the purchased option, and the charity has assumed the burden of the written option. No aspect of the taxpayer's transfer or the charity's assumption (or their combination) relieves the taxpayer from its duty under the Code to account for the gain attributable to the premium originally received by the taxpayer for assuming the burden of writing the option. See Lucas v. Earl , 281 U.S. 111 (1930) (holding that a taxpayer may not avoid inclusion of future earned income by making a gratuitous transfer of the right to receive the income). Finally, if the taxpayer has any unrecognized gain on the written option at the end of the year in which the assumption occurs (e.g., the assumption did not terminate the option writer's obligation under the option contract), the mark-to-market loss on the offsetting contributed section 1256 contract will be deferred under section 1092. Transactions that are the same as, or substantially similar to, the transactions described in this notice are identified as "listed transactions" for purposes of §§1.6011-4(b)(2), 301.6111-2(b)(2) and 301.6112-1(b)(2) effective December 4, 2003, the date this notice was released to the public. Variations on these transactions may include positions in other section 1256 and non-section 1256 contracts. Independent of their classification as "listed transactions" for purposes of §§1.6011-4(b)(2), 301.6111-2(b)(2), and 301.6112-1(b)(2), transactions that are the same as, or substantially similar to, the transaction described in this notice may already be subject to the disclosure requirements of section 6011 (§1.6011-4), the tax shelter registration requirements of section 6111 (§§301.6111-1T, 301.6111-2), or the list maintenance requirements of section 6112 ( §301.6112-1). Persons who are required to register these tax shelters under section 6111 but have failed to do so may be subject to the penalty under section 6707(a). Persons who are required to maintain lists of investors under section 6112 but have failed to do so (or who fail to provide those lists when requested by the Service) may be subject to the penalty under section 6708(a). In addition, the Service may impose penalties on parties involved in these transactions or substantially similar transactions, including the accuracy-related penalty under §6662. The Service and the Treasury recognize that some taxpayers may have filed tax returns taking the position that they were entitled to the purported tax benefits of the type of transaction described in this notice. These taxpayers should consult with a tax advisor to ensure that their transactions are disclosed properly and to take appropriate corrective action. The principal author of this notice is Clay Littlefield of the Office of Associate Chief Counsel (Financial Institutions and Products). For further information regarding this notice, contact Mr. Littlefield at (202) 622-3920 (not a toll-free call). Part III – Administrative, Procedural, and Miscellaneous. Modification of Notice 2003-81. This Notice modifies and supplements Notice 2003-81, 2003-2 C.B. 1223, by correcting a statement in the "Facts" portion of Notice 2003-81. On December 4, 2003, the Internal Revenue Service ("Service") and the Treasury Department ("Treasury") published Notice 2003-81, which described a tax avoidance transaction involving offsetting foreign currency options and identified such transaction and those substantially similar to it as listed transactions for purposes of §1.6011-4(b)(2) of the Income Tax Regulations and §§301.6111-2(b)(2) and 301.6112-1(b)(2) of the Procedure and Administration Regulations. In the transaction described in Notice 2003-81, a taxpayer pays premiums to purchase a call option and a put option (the purchased options) on a foreign currency in which positions are traded through regulated futures contracts. The purchased options are reasonably expected to move inversely in value to one another over a relevant range, thus ensuring that, as the value of the underlying foreign currency changes, the taxpayer will hold a loss position in one of the two purchased options. The taxpayer also receives premiums for writing a call option and a put option (the written options) on a different foreign currency in which positions are not traded through regulated futures contracts. The taxpayer takes the position that the written options are neither foreign currency contracts within the meaning of §1256(g)(2)(A) nor §1256 contracts within the meaning of §1256(b). The written options are reasonably expected to move inversely in value to one another over a relevant range, thus ensuring that, as the value of the underlying foreign currency changes, the taxpayer will hold a gain position in one of the two written options. The values of the two currencies underlying the purchased and written options (i) historically have demonstrated a very high positive correlation with one another, or (ii) officially have been linked to one another, such as through the European Exchange Rate Mechanism (ERM II). Thus, as the currencies change in value, the taxpayer reasonably expects to have the following potential gains and losses in substantially offsetting positions: (1) a loss in a purchased option and a gain in a written option; and (2) a gain in a purchased option and a loss in a written option. At any time, the taxpayer's loss in the purchased option position that has declined in value may be more or less than the taxpayer's gain in the offsetting written option position that has appreciated in value. Similarly, the taxpayer's gain in the remaining purchased option position may be more or less than the taxpayer's loss in the remaining written option position. A material pre-tax profit or rate of return, or both, on the transaction is possible but unlikely. The taxpayer assigns to a charity the purchased option that has a loss. The charity also assumes the taxpayer's obligation under the offsetting written option that has a gain. The premium received on that written option is not assigned but is retained by the taxpayer. As with all written options, the amount of gain on the option is limited to the premium received for the option. In the same tax year, the taxpayer may dispose of the remaining purchased option and offsetting written option. Because the taxpayer takes the position that the purchased option assigned to the charity is a §1256 contract, the taxpayer relies on §1256(c) and Greene v. United States, 79 F.3d 1348 (2d Cir. 1996) to mark to market the purchased option when the option is assigned to the charity and to recognize a loss at that time. In contrast, because the taxpayer takes the position that the assumed written option is not a §1256 contract, the taxpayer claims not to recognize gain attributable to the option premium. Specifically, the taxpayer claims that the charity's assumption of the option obligation does not cause the taxpayer to recognize gain and that the taxpayer also does not recognize gain either at the time the option expires or terminates or at any other time. Although as a general matter the "Facts" portion of Notice 2003-81 correctly describes the transaction at issue, it includes an erroneous conclusion of law. The second sentence in the "Facts" portion of Notice 2003-81 states: "The currency is one in which positions are traded through regulated futures contracts, and the purchased options, therefore, are foreign currency contracts within the meaning of §1256(g)(2)(A) of the Internal Revenue Code and §1256 contracts within the meaning of §1256(b)." This sentence should have stated "The taxpayer takes the position that the purchased options are foreign currency contracts within the meaning of §1256(g)(2)(A) of the Internal Revenue Code and §1256 contracts within the meaning of §1256(b)." The Service and Treasury do not believe that foreign currency options, whether or not the underlying currency is one in which positions are traded through regulated futures contracts, are foreign currency contracts as defined in §1256(g)(2), and intend to challenge any such characterization by taxpayers. Section 1256(g)(2)(A) defines a foreign currency contract, in part, as a contract that requires delivery of, or the settlement of which depends on the value of, certain foreign currencies. The original statutory definition, however, did not allow for cash settlement and required actual delivery of the underlying foreign currency in all circumstances. Options, by their nature, only require delivery if the option is exercised. Section 102 of the Tax Reform Act of 1984, P.L. 98-369, 1984-3 (Vol. 1) C.B. 128, added the clause "or the settlement of which depends on the value of." There is no indication, however, that Congress intended by this addition to extend the definition of "foreign currency contract" to foreign currency options. That conclusion is confirmed by the legislative history to §988(c)(1)(E), enacted by the Technical and Miscellaneous Revenue Act of 1988, P.L. 100-647, 1988-3 C.B. 377-380, which indicates that a foreign currency option is not a foreign currency contract as defined in §1256(g)(2). Subject to the following, §7805(b) relief is granted to taxpayers that adopted an accounting method in reasonable reliance on Notice 2003-81 to treat over-the-counter foreign currency options as foreign currency contracts as defined in §1256(g)(2). Section 7805(b) relief is not granted with respect to options entered into in transactions that are the same or substantially the same as those described in Notice 2003-81. Further, §7805(b) relief is not granted with respect to options entered into in any transaction identified as a listed transaction for purposes of §§1.6011-4(b)(2), 301.6111-2(b)(2) and 301.6112-1(b)(2). The principal authors of this notice are Mark E. Erwin of the Office of Associate Chief Counsel (International) and Patrick E. White of the Office of Associate Chief Counsel (Financial Institutions and Products). For further information regarding this notice contact Mark E. Erwin at (202) 622-3870 or Patrick E. White at (202) 622-3920 (not a toll free call. Chief Counsel Advice 201845022. described in § 1.6011-4(c)(3), in a reportable transaction within the meaning of. § 1.6011-4(b) and who is required to file a tax return must file within the time prescribed. in § 1.6011-4(e) a disclosure statement in the form prescribed by § 1.6011-4(d). obligations under § 1.6011-4 as a result of claiming losses under § 165. and Situation 4, described below, are complete under § 1.6011-4(d).
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