Navigating Section 988 Foreign Currency Transaction Reporting Rules for Options, Straddles and Hedges
Utilizing Elections and Avoiding Traps in Foreign Currency Options, Section 1092 Contracts, and Other Transactions
Recording of a 110-minute CPE webinar with Q&A
This webinar will provide a comprehensive guide to reporting foreign currency transactions. The panel will outline the ground rules under IRC Section 988, and discuss scenarios where the taxpayer may elect out of ordinary income treatment.
The panel will also give practical tools to navigating the complex rules governing foreign currency. The event will discuss the US federal income tax consequences of individuals who hold foreign currency, invest in foreign stock and bonds, foreign currency futures or other derivatives, and will offer guidance on when a taxpayer might need to complete Form 8886 to disclose a reportable transaction arising from a foreign currency loss.
- Background to Transactions Involving Foreign Currency
- Section 988 Transactions
- Exceptions, Limitations, and Qualifications to Section 988 Transactions
- Character Rules
- Sourcing Rules
- Reportable Transaction Rules
- Examples and Explanations
The panel will discuss these and other important questions:
- How was foreign currency taxed prior to Section 988?
- How is foreign currency taxed after the enactment of Section 988?
- What is functional currency?
- If an individual buys foreign currency for personal transactions, do these rules really apply?
- How are debt instruments denominated in foreign currency taxed?
- How are derivative instruments the value of which is linked to foreign currency taxed?
- What is the character of gain or loss attributable to fluctuations in foreign currency?
- When can you elect out of the default character rules?
- How do you elect out?
- What are the sourcing rules pertaining to foreign currency?
- What is a qualifying hedging transaction?
- How do these rules intersect with other Code provisions such as Sections 1256, 1092, or 475?
- When do the reportable transaction rules apply?
Mr. Gray's practice is focused on tax controversy, IRS Offshore Voluntary Disclosure programs, FATCA, and... | Read More
Mr. Gray's practice is focused on tax controversy, IRS Offshore Voluntary Disclosure programs, FATCA, and international taxation. He is an adjunct professor at New York Law School where he teaches a course on the taxation of intangible property. He is a frequent presenter and writer on various corporate and tax topics. Prior to forming his firm, he was an attorney at several large law firms, where he focused on capital markets, financial products, international tax, and corporate and partnership tax.Close
Dr. Dean Smith
Dr. Smith's practice focuses on international tax and corporate tax. He is President of The British Canadian... | Read More
Dr. Smith's practice focuses on international tax and corporate tax. He is President of The British Canadian Chamber of Trade and Commerce. He previously served as National Practice Leader - Expatriate Tax Solutions with Grant Thornton. President of British Canadian Chamber of Trade and Commerce (BCCTC). He served as Chairman of the tax committee of American Chamber of Commerce in Canada (Amcham).Close