At the beginning of this series, I mentioned briefly that taxpayers can use tax-loss harvesting approaches in tandem with a number of investment strategies, which we will go into in more detail in Part III. Many of these...more
7/25/2025
/ Capital Gains ,
Income Taxes ,
Internal Revenue Code (IRC) ,
Investment ,
Investors ,
IRS ,
Securities ,
Tax Deductions ,
Tax Liability ,
Tax Losses ,
Tax Planning ,
Taxation ,
Wash Sale Rules
What is tax-loss harvesting? “Tax-loss harvesting,” in its simplest form, is the sale of a capital asset at a loss to “mop up” tax that would otherwise be due on capital gain from the sale of another capital asset. Capital...more
What is a hedged executory contract? A “hedged executory contract” is another type of transaction that is eligible for integration under Code Section 988(d). A hedged executory contract results when a taxpayer enters into an...more
6/12/2024
/ Capital Assets ,
Capital Gains ,
Capital Losses ,
Financial Transactions ,
Foreign Currency ,
Foreign Entities ,
Hedges ,
Hedging ,
Internal Revenue Code (IRC) ,
IRS ,
Securities ,
Tax Planning
Are there special hedging provisions for section 988 transactions? Yes. In addition to the business hedging rules I address in our earlier Q&A with Andie series, a special hedging provision is available at Code section 988(d)...more
6/5/2024
/ Capital Assets ,
Capital Gains ,
Capital Losses ,
Financial Transactions ,
Foreign Currency ,
Foreign Entities ,
Hedges ,
Hedging ,
Internal Revenue Code (IRC) ,
IRS ,
Tax Planning
Which transactions qualify as section 988 transactions?
In section 988 transactions, the taxpayer makes payments or receipts denominated in or determined by reference to one or more nonfunctional currency. ...more
Are all foreign currency gains taxable?
No. Under a de minimis exemption individual taxpayers with foreign currency gains of $200 or less on a “personal transaction” do not need to report them....more
Navigating the federal taxation of foreign currency can be compared to trying to cross a perilous sea. Both involve unexpected rough patches, serious difficulties, and frustrating complexity....more
Do the tax hedge rules apply to consolidated tax groups? Yes. The Treasury Regulations treat members of a consolidated corporate group as divisions of a single entity. As a single entity, the risks and positions of all group...more
5/3/2024
/ Business Taxes ,
Capital Gains ,
Capital Losses ,
Corporate Taxes ,
Hedges ,
Hedging ,
Income Taxes ,
Popular ,
Securities Dealers ,
Tax Planning ,
Tax Returns
When must a hedge be identified and accounted for tax purposes? Taxpayers must identity each hedging transaction and the item it hedges. A taxpayer must clearly identify a hedging transaction “before the close of the day on...more
What is the “tax character” of a hedge? A taxpayer receives ordinary gain or loss on qualified hedges that have been properly identified in accordance with Treasury Regulation § 1.1221-2. This allows a taxpayer to ensure that...more
4/12/2024
/ Asset Management ,
Business Taxes ,
Capital Losses ,
Corporate Taxes ,
Debt ,
Hedges ,
Hedging ,
Interest Rates ,
Internal Revenue Code (IRC) ,
Investment ,
Reporting Requirements ,
Risk Management ,
Tax Planning
Enterprise Risk Management is widely used in many industries and businesses. Risk managers use increasingly sophisticated approaches, methods, analytics, and frameworks to manage complex, interrelated, and interconnected...more
In November 2023, almost 11,000 cryptocurrencies and digital tokens were listed on CoinMarketCaps.com. In addition, tens of thousands of non-fungible tokens (NFTs) are sold daily on various crypto exchanges and NFT platforms....more
12/27/2023
/ Abandoned Property ,
Capital Losses ,
Cryptoassets ,
Cryptocurrency ,
Digital Assets ,
Non-Fungible Tokens (NFTs) ,
Ponzi Scheme ,
Securities ,
Tax Deductions ,
Tax Planning ,
Theft ,
Trading Platforms
Businesses often manage their price risks by hedging those risks with financial derivative contracts. Because businesses generate ordinary income and loss on their normal business activities, they want to be sure their...more
Introduction Until Notice 2023-27, the Internal Revenue Service (IRS) was silent about the tax treatment of nonfungible tokens (NFTs). When the IRS turned to NFTs, it focused on one aspect of NFTs: whether certain NFTs should...more
The taxation of derivatives and financial products has developed in an uncoordinated and piecemeal fashion. Tax rules have largely been enacted in response to what the government has perceived as abusive transactions —...more
3/22/2023
/ Anti-Abuse Rule ,
Asset Management ,
Derivatives ,
Financial Products ,
Internal Revenue Code (IRC) ,
Investment ,
Investors ,
IRS ,
Tax Liability ,
Tax Planning ,
Wash Sale Rules
You need to consider how you’ll report digital asset transactions on your 2022 tax returns. Tax reporting requirements for digital assets have changed yearly since 2019, when the IRS first added a question about crypto to IRS...more
3/21/2023
/ Bitcoin ,
Cryptocurrency ,
Digital Assets ,
Financial Planning ,
Income Taxes ,
Internal Revenue Code (IRC) ,
Investment Products ,
IRS ,
Non-Fungible Tokens (NFTs) ,
Stablecoins ,
Tax Liability ,
Tax Planning ,
Virtual Currency
Explosive growth in digital assets has left investors with real questions about how to donate cryptocurrency and non-fungible tokens. That the tax bills are high enough to generate this interest is clear evidence of the gains...more
3/6/2023
/ 501(c)(3) ,
Charitable Donations ,
Cryptocurrency ,
Digital Assets ,
Donor-Advised Funds (DAFs) ,
Internal Revenue Code (IRC) ,
IRS ,
Non-Fungible Tokens (NFTs) ,
Tax Deductions ,
Tax Incentives ,
Tax Planning