In This Issue:

House Ways & Means Committee Proposal Would Require Mark-to-Market for Derivatives and Modify Certain Other Tax Rules; After Months of Anticipation, Final FATCA Regulations Released; Congress Considers Financial Transaction Tax Bill; Proxy Agreement No Barrier to Affiliated Group Membership; Reorganization Plan Qualifies for Bankruptcy Exception to NOL Limitation Rules; Holding the PHONE?—Equity Linked Debt Instrument Forms Part of a Straddle; IRS Releases New FATCA Form; Ambac Seeks Bankruptcy Court Approval of Settlement with Government Resolving Dispute Arising out of Tax Treatment of Credit Default Swaps; and MoFo in the News.

Excerpt from House Ways & Means Committee Proposal Would Require Mark-to- Market for Derivatives and Modify Certain Other Tax Rules -

For many years, academics have proposed that the U.S. replace the current hodgepodge U.S. federal income tax rules applicable to financial derivatives with a “mark-to-market” regime. In the first significant legislative initiative ever on this topic, Representative David Camp (R. MI), Chairman of the House Committee on Ways and Means, recently released a discussion draft containing proposed legislation to reform the taxation of financial instruments. If enacted, the legislation would apply to most financial instruments beginning January 1, 2014. Designed to be part of a package of comprehensive tax reform, the proposal, if adopted, would radically alter the current taxation of financial products.