Tax Treatment of Derivative Positions Assumed by Affiliated Entities

SIFMA provides comments to the U.S. Department of Treasury and the Internal Revenue Service (IRS) requesting guidance on implementation of Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) relating to the tax treatment of derivative positions assumed by affiliated entities.  SIFMA writes to seek express confirmation (in the form of a notice or otherwise) that the assumption of a derivative position by a related derivatives dealer does not cause the assignor’s counterparty to be deemed, for tax purposes, to have terminated its position and entered into a new one.