Wyden Derivatives Proposal Includes Key Real Estate Exemption

Senate Finance Committee Ranking Member Ron Wyden (D-OR) released a discussion draft tax proposal on May 18 that would require mark-to-market for derivative financial instruments. As such, the proposal would require that taxpayers holding derivatives treat them as being exercised at the end of each year, thereby triggering taxable gain or loss.

As requested by NAREIT in comments provided to the tax writing committees, Wyden’s proposal includes an exception relevant to REITs and real estate interests. Specifically, the statutory draft exempts common real estate transactions pending over the end of the calendar year from the definition of “derivative.”

Wyden requested that comments on the discussion draft be submitted by Aug. 17.

(Contact: Cathy Barre at cbarre@nareit.com)

 

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