Foreign Currency Contract

Foreign Currency Contract

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1256(g)(2)(A)(i) defines a foreign currency contract in part as a contract "which requires delivery of, or the settlement of which depends on the value of, a foreign currency which is a currency in which positions are also traded through regulated futures contracts.
For this purpose, a foreign currency contract, by definition, is a contract
Banks must maintain transfer records for a period of five years after an account opens or after any financial transaction takes place and seven years after foreign currency contract transactions, whichever is later.
trader who needs foreign currency for a business transaction in six months could sell a futures foreign currency contract for the same amount maturing in six months.
14) For this purpose, a foreign currency contract is a contract that (1) requires delivery of, or the settlement of which depends on the value of, a foreign currency in which positions are also traded through regulated futures contracts; (2) is traded in the interbank market; and (3) is entered into at arm's length at a price determined by reference to the price in the interbank market.
The Tax Court held that a foreign currency call option is not a foreign currency contract under the plain language of the IRC [section] 1256 contract mark-to-market rules.
The Sixth Circuit held that a contract does not have to require delivery or settlement of a foreign currency to be a foreign currency contract for purposes of Sec.
Having addressed regulated futures contracts and nonequity options above, and noting that the option is not a dealer equity option or a dealer securities futures contract (because K is not a dealer), that leaves open the question of whether the option is a foreign currency contract.
1256 special timing rule, a taxpayer must determine taxable income or expense in respect of any foreign currency contract annually on a mark-to-market basis (i.
9 million charge from our foreign currency contract settlements and a non-cash $17.
This had an adverse effect on our forward foreign currency contracts.
Most clients purchase foreign currency contracts to offset currency fluctuation risk.

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