This week has been a busy one for new regulation affecting the futures and options industry. It started off on Monday with the Treasury’s 2010 revenue proposal that included a proposal to eliminate 60/40 tax treatment for futures and options traders. Then on Wednesday, the Treasury Department released a proposal on regulatory reform for over the counter (OTC) derivatives. That one was less of a bombshell.
The U.S. Treasury’s 2010 revenue proposal, released Monday, included a bombshell for the futures and options industry: the possibility of the end of preferential 60/40 tax treatment for futures and options. Under the 60/40 rule, enacted 25 years ago, for U.S. futures contracts 60% of gains are considered long-term gains, taxed up to 15%, and the remaining 40% of gains are considered short-term gains, taxed up to 35%. The Treasury’s proposal would eliminate 60/40 treatment. (more…)
