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Congressional Research Service
Version 00 · 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.
Showing the opening paragraphs of the official summary.
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.
People & committees
Sen. Wyden, Ron [D-OR] · D–OR
Legislative record
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Read twice and referred to the Committee on Finance.
Introduced in Senate
Primary sources
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No related bills are listed in this snapshot. This does not establish whether the proposal has appeared in earlier Congresses.
Source last updated: Jan 3, 2025. Consult Congress.gov for the current record.
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