Tax Planning Strategies for Derivative Financial Products

Leveraging Tax Benefits From Emerging IRS Guidance

Recording of a 90-minute premium CLE/CPE webinar with Q&A

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Conducted on Tuesday, February 24, 2009

Course Materials

This seminar will examine emerging and settled tax issues in the area of derivatives. The seminar will focus on recent developments in tax law relating to these financial products with particular focus on nontraditional derivatives.


The use of derivatives and other financial products are a mainstay in the financial markets. As the number and types of financial products grow and evolve, tax laws and regulations can't keep up with these developments. Too often, the current tax regime produces unanticipated results.

Different tax rules apply in different contexts, depending on the type of investor, income source, or transaction’s purpose. When new financial products are introduced, there are no clear rules for tax treatment and practitioners must try to fit these new products into exiting "cubbyholes."

Without clear guidance for tax advisors as to which category a particular transaction should fit in, there is ambiguity in structuring the transaction and applying the tax rules. Often, this cubbyhole approach leads to different tax treatment for transactions that are economically equivalent.

Listen as our authoritative panel of tax specialists discusses the various tax laws and regulations that apply to financial products and provide their insights and perspectives on the latest developments in financial product tax controversies.



  1. Approaches to Determine the Tax Treatment of New Financial Products
      1. Existing rules for traditional derivatives (options, forwards, future contracts, swaps)
      2. Market practice or cubbyhole approach for new financial products
      3. Unexpected or disparate tax consequences
  2. Current Tax Controversies for Nontraditional Derivatives
      1. Credit derivatives
      2. Prepaid forward contracts and exchange traded notes (ETNs)
      3. Variable prepaid forward contracts


The panel will review these and other key questions:

  • How can tax attorneys utilize the market practice approach to determine the tax treatment of new financial products?
  • What are the latest tax controversies regarding credit derivatives?
  • How is the IRS scrutinizing prepaid forward contracts, such as exchange traded notes (ETN)?


Matthew A. Stevens
Matthew A. Stevens

Alston Bird

He specializes in the design, structuring and implementation of financial transactions, including preferred stock...  |  Read More

Viva Hammer
Viva Hammer

Crowell Moring

She recently joined the firm in its tax and financial services groups. She previously worked in the Office of Tax...  |  Read More

Geoffrey B. Lanning
Geoffrey B. Lanning

White Case

His practice focuses on taxation of corporations and corporate reorganizations, subchapter S corporations, financial...  |  Read More

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