|
PureBytes Links
Trading Reference Links
|
>> > Could you tell us what 475(f) says (apparently it's a new
code section which
>> > hasn't been incorporated in the IRC on line yet)? Robyn
from the site:
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=1998_jo
int_committee_on_taxation&docid=f:52240.wais
(about 1/2 way down - search for 475(f) to find it.) Much more is
on that site.
My quick take:
No self-employment tax.
Capital gains/losses treated as such. (not ordinary income)
-----------------------
Effective Date
The provision is generally effective for constructive sales
entered into after June 8, 1997.
3. Treatment of mark-to-market gains of electing traders (sec.
6010(a)(3) of the 1998 IRS Restructuring Act, sec.
1001(b) of
the 1997 Act, and sec. 475(f)(1)(D) of the Code)
Present and Prior Law
Securities and commodities traders may elect application of
the mark-to-market accounting rules. Gain or loss recognized by
an electing taxpayer under these rules is treated as ordinary
gain or loss.
Under the Self-Employment Contributions Act (``SECA''), a
tax is imposed on an individual's net earnings from self-
employment (``NESE''). Gain or loss from the sale or exchange
of a capital asset is excluded from NESE.
A publicly-traded partnership generally is treated as a
corporation for Federal tax purposes. An exception to this rule
applies if 90 percent or more of the partnership's gross income
consists of passive-type income, which includes gain from the
sale or disposition of a capital asset.
Explanation of Provision
The provision clarifies that gain or loss of a securities
or commodities trader that is treated as ordinary solely by
reason of election of mark-to-market treatment is not treated
as other than gain or loss from a capital asset for purposes of
determining NESE for SECA tax purposes, determining whether the
passive-type income exception to the publicly-traded
partnership rules is met or for purposes of any other Code
provision specified by the Treasury Department in regulations
Patrick White
|