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

A live 110-minute CPE webinar with interactive Q&A


Thursday, November 15, 2018 (Today)

1:00pm-2:50pm EST, 10:00am-11:50am PST

or call 1-800-926-7926
Program Materials

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 presenters will also give practical tools to navigating the complex rules governing foreign currency. The event will discuss the U.S. 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.

Description

The mechanics of reporting foreign currency transactions presents significant complexity for U.S. taxpayers whose functional currency is the U.S. dollar, as well as planning opportunities for their advisers.

This panel will discuss the tax consequences of various transactions involving foreign currency, including the tax treatment of investments in and dispositions of foreign currency; the tax treatment of debt instruments denominated in or the value of which is determined by foreign currency; and the tax consequences of derivative transactions involving foreign currency.

The Service issued proposed regulations in Dec. 2017 that may offer significant relief to some taxpayers engaged in foreign currency transactions, allowing taxpayers to elect mark-to-market treatment for foreign currency gain or loss attributable to Section 988 transactions. The proposed regulations also permit the controlling U.S. shareholders of a CFC to automatically revoke certain elections concerning the treatment of foreign currency gain or loss.

The panel will also discuss the “reportable transaction” rules about foreign currency transactions. Tax advisers serving clients with foreign currency assets should be well-versed in the shelter rules to avoid costly tax penalties and unnecessary IRS scrutiny of foreign currency losses.

Listen as the panel discusses the tax consequences of such instruments through examples and explanation approach.

READ MORE

Outline

  1. Background to transactions involving foreign currency
  2. Section 988 transactions
    1. Exceptions, limitations and qualifications to Section 988 transactions
    2. Character rules
    3. Sourcing rules
  3. Proposed REG–119514–15 allowing mark-to-market election
  4. Reportable transaction rules
  5. Examples and explanations

Benefits

The panel will discuss these and other essential questions:

  • How was foreign currency taxed before 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 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 and how can you elect out of the default character rules?
  • What are the sourcing rules about 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?

Faculty

Gray, Armin
Armin Gray

Managing Partner
Gray Tolub

Mr. Gray's practice is focused on tax controversy, IRS Offshore Voluntary Disclosure programs, FATCA, and...  |  Read More

Hsu, Doris
Doris S. Hsu

Principal
The Hsu Law Firm

Ms. Hsu has counseled clients for almost 20 years on the appropriate structures for their businesses and personal...  |  Read More

Smith, Dean
Dr. Dean Smith

Partner
Cadesky Tax

Dr. Smith's practice focuses on international tax and corporate tax. He is President of The British Canadian...  |  Read More

Live Webinar

Buy Live Webinar
CPE credit processing is available for an additional fee of $35. CPE processing must be ordered prior to the event.
See NASBA details.

Live Webinar

$147

Live Webinar & CPE Processing

$182

Buy Live Webinar & Recording
A savings of $100

Live Webinar & Download

$194

Live Webinar & DVD

$194 + $19.45 S&H

Other Formats
— Anytime, Anywhere

Download

48 hours after event

CPE Not Available

$147

DVD

10 business days after event

CPE Not Available

$147 + $19.45 S&H