MoFo Tax Talk, Volume 3, Issue 3

EDITOR'S NOTE

In the third quarter 2010, the Tax Court released its opinion in Anschutz Company v. Comm'r, 135 T.C. No. 5 (July 22, 2010), holding that the variable prepaid forward contract plus the stock loan at issue was a sale for U.S. federal income tax purposes. The IRS also issued much anticipated guidance on the new Foreign Account Tax Compliance Act ("FATCA") withholding and reporting rules and guidance (albeit limited) on the codification of the economic substance doctrine. The International Swaps and Derivatives Association also released a protocol on new Section 871(l) (redesignated recently as Section 871(m) by H.R. 1586) addressing withholding tax on certain cross-border equity swaps. FATCA withholding and reporting, economic substance, and Section 871(l) were part of new legislation enacted into law in March 2010.