In This Issue:

Bailout Bill Tax Provisions ................................. 1

Borrower's Default on Securities Loan Doesn?t Trigger Taxable Event to Lender .....................2

Credit Crunch Results in Suspension of AHYDO Rules .......................................2

Section 1032 Disallows Subsidiary Loss on Forward Contract Involving Parent Stock .......................................2

Foreign Tax Credit Regulations .................................3

Legislative Changes Affect REITs .......................................4

Senate Targets Dividend Withholding Tax Abuse .......................................4

MoFo in the News ............................5

The Learning Annex: Options Pricing and the Taxation of Derivatives..................................6

Reporting Discharges of Debt ........................................7

Focus on Withholding ........................7

Press Corner ................................8