Schematics of the Operation of the Proposed Section 475 Safe Harbor

摘要

In a Notice of Proposed Rulemaking, Treasury and the IRS have proposed a safe harbor for taxpayers marking to market that would allow them to make an election under which the values of positions reported on certain financial statements would be considered the fair market values of those positions under Section 475. In May 2003, Treasury issued an Advance Notice of Proposed Rulemaking (Safe Harbor for Satisfying Certain Statutory Requirements for Valuation under Section 475 for Certain Securities and Commodities), and the proposed regulations follow through on the safe harbor concept outlined in the earlier release.