Estate of McKelvey v. Commissioner tax planning opportunity or a trap for the unwary ? Mark Fichtenbaum and Robert Gordon
By: Fichtenbaum, Mark
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Material type: 
ArticlePublisher: 2017Subject(s): IMPUESTOS | PLANIFICACION FISCAL | ESTADOS UNIDOS | JURISPRUDENCIA | SOCIEDADES
In:
Journal of Taxation of Investments v. 34, n. 4, Summer 2017, p. 25-30Summary: In a highly unexpected result, the Tax Court in Estate of McKelveyv. Commissioner ruled that the extension in maturity of a profitableprepaid variable forward contract (PPVF) was not a taxable event. If this case could be relied upon, a hedger who is Rolling over a profi table PPVF could avoid realizing gain on the PPVF bysimply extending the maturity of the contract. Although tempting, the authors think this procedure could turn out to be disastrousif the case is overturned. Commenters have speculated that this decision could also delay the crystallization of profi ts on an optionthat one had sold, though this avenue may carry much less bite if the Tax Court is reversed.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| IEF | OP 235/2017/34/4-2 (Browse shelf) | Available | OP 235/2017/34/4-2 |
Disponible también en línea a través de la Biblioteca del Instituto de Estudios Fiscales. Resumen. Conclusión.
In a highly unexpected result, the Tax Court in Estate of McKelveyv. Commissioner ruled that the extension in maturity of a profitableprepaid variable forward contract (PPVF) was not a taxable event. If this case could be relied upon, a hedger who is Rolling over a profi table PPVF could avoid realizing gain on the PPVF bysimply extending the maturity of the contract. Although tempting, the authors think this procedure could turn out to be disastrousif the case is overturned. Commenters have speculated that this decision could also delay the crystallization of profi ts on an optionthat one had sold, though this avenue may carry much less bite if the Tax Court is reversed.
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