S. 2621 · 117th Congress
Modernization of Derivatives Tax Act of 2021
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Never voted on. It didn't reach a floor vote before the 117th Congress ended, so it expired. A bill has to be introduced again to be considered in a new Congress.
D
WydenSponsorNo cosponsors.
This bill modifies the tax treatment of derivatives. A derivative is any contract (including any option, forward contract, futures contract, short position, swap, or similar contract) the value of which, or any payment or other transfer with respect to which, is (directly or indirectly) determined by reference to another specified item.
What it does: CRS summary · Introduced in Senate · Aug 5, 2021
Modernization of Derivatives Tax Act of 2021
This bill modifies the tax treatment of derivatives. A derivative is any contract (including any option, forward contract, futures contract, short position, swap, or similar contract) the value of which, or any payment or other transfer with respect to which, is (directly or indirectly) determined by reference to another specified item.
The bill modifies the tax treatment of derivatives to (1) require mark to market treatment (treating the contracts as if they had been terminated or transferred at fair market value at the end of the year) for derivatives not terminated or transferred during the year, (2) require gains and losses to be taxed at ordinary tax rates and sourced to the taxpayer's country of residence, and (3) revise the reporting requirements and tax rules that apply to taxpayers that use derivatives to hedge capital assets.
The bill includes several exceptions for
- certain real property;
- hedging transactions;
- securities lending, sale-repurchase, and similar financing transactions;
- options received in connection with the performance of services;
- insurance contracts, annuities, and endowments;
- derivatives with respect to stock of members of the same worldwide affiliated group; and
- commodities used in the normal course or trade of business.
Written by the nonpartisan Congressional Research Service. All summary versions on Congress.gov
About this bill and sources
Official title: Modernization of Derivatives Tax Act of 2021
Latest action (Aug 5, 2021): Read twice and referred to the Committee on Finance.
Policy area: Taxation · Origin: Senate · Introduced: Aug 5, 2021
Official page on Congress.gov · Bill text (GovInfo) · Status record (XML)
No recorded floor vote found.