KPMG Says Broadly Defining Derivatives Necessitates Exemptions for Some Products

Feb. 21, 2013, 5:00 AM UTC

Illiquid and untraded derivatives should escape mark-to-market valuations being considered for taxing derivatives, Jonathan Zelnik, principal in the financial institutions and products group of KPMG LLP’s Washington National Tax practice said in a Feb. 20 webinar.

He also pointed to several other potential carve-outs for a draft proposal for changing the tax treatment of certain financial instruments, circulated Jan. 24 by House Ways and Means Committee Chairman Dave Camp (R-Mich.) The goal is to provide for uniform treatment of derivatives, but Zelnik said concerns arise from the draft’s “overly broad” definition of the instruments, (17 DTR G-5, 1/25/13). ...

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