Replacing a Swap Counterparty A Primer on Deemed Termination, Withholding, and Other U.S. Tax Issues
Author: Angela Sellman.
Source: Volume 22, Number 06, July/August 2009 , pp.29-35(7)
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Abstract:
The current financial crisis has prompted an increase in the practice of substituting counterparties to swaps and other derivative contracts. When substituting counterparties to swaps or other derivative contracts—a practice becoming all the more common in the current economic climate—the nonassigning party must consider the multiplicity of related U.S. income tax consequences. This article considers some of the federal income tax consequences to a non-assigning party resulting from the replacement of a counterparty to a swap.Keywords: 1001-4 Regulation; Derivative Contracts
Affiliations:
1: Freshfields Bruckhaus Deringer US LLP.