Proposed Regulations on Capital Asset Exclusion

SIFMA provides comments to the Internal Revenue Service (IRS) on proposed regulations under Section 1221(a)(4) of the Internal Revenue Code relating to capital asset exclusion for accounts and notes receivable.  The proposal would alter long-standing treatment of consumer loans, mortgages and other receivables.  SIFMA urges the IRS to withdraw the proposal, because the requirements of the proposal would result in character mismatches on hedges and seriously impede the ability of these businesses to tax-efficiently hedge the various risks embedded in these loans.