Review of Changes in Securities Transactions Taxation

Recent efforts to stimulate the bond market and the overall economy have changed rules affecting cancellation of indebtedness, high yield obligations, and qualified small business stock.  This comprehensive article provides a review of changes in securities transactions taxation that have resulted largely in response to the recent economic downturn. Codification of the economic substance doctrine, potential taxation of securities transactions, and regulation of over-the-counter derivatives are covered in this article. A guide is also provided to recent legislation and IRS pronouncements, including a bond comparison chart for efficient and effective tax analysis and planning.

Important guidance provided in this article is available online on LexisNexis® Tax Center and also in print at the LexisNexis® Store.

Table of Contents

§1.01 Introduction

§1,02 Stimulating the Bond Market

§1.03 Cancellation of Indebtedness

§1.04 Modification of Rules for Original Issue Discount on Certain High Yield Obligations

§1.05 IRS Response to Financial Difficulties

§1.06 The Economic Substance Doctrine

§ 1.07 Increased Reporting Requirements

§ 1.08 The Uncertain Future of Securities Transactions

§ 1.09 Conclusion

Appendix A - Bond Summary Chart