Home      Login


Transitions From IBOR to Alternative Rates Avoid Tax Under Proposed Regulations  


Author:  Mark Howe.; Michael Recchia.


Source: Volume 37, Number 02, Winter 2020 , pp.3-11(9)




Journal of Taxation of Investments

next article > |return to table of contents

Abstract: 

Recently proposed U.S. treasury regulations confirm that replacing interbank offered rates with alternative reference rates in certain financial instruments will not be treated as taxable events for U.S. federal income tax purposes. The proposed regulations anticipate the elimination of LIBOR and the emergence of replacement benchmark rates in new and existing financial contracts. They are a welcome addition to the regulatory landscape as markets begin to transition substantial amounts of debt instruments and derivatives away from LIBOR and into alternative reference rates.

Keywords: Interbank Offered Rates, LIBOR Phase-Out, Debt Instrument Modification, REG-118784018, Prop. Treas. Reg. Sec. 1.1001-6

Affiliations:  1: Cadwalader, Wickersham & Taft LLP; 2: Cadwalader, Wickersham & Taft LLP.

Subscribers click here to open full text in PDF.
Non-subscribers click here to purchase this article. $23

next article > |return to table of contents