U.S. House said to ready draft of tax changes for financial products

Draft could be released this week...

Taxes, scale Taxes, scale

The House Ways and Means Committee will release a draft version of potential changes to the taxation of financial products and derivatives, according to a committee aide familiar with the plans.

The draft could be released for review and discussion as soon as this week, said the aide, who asked not to be named in order to discuss the matter.

The proposals are part of Committee Chairman Dave Camp’s efforts to overhaul the tax code. The Michigan Republican released a similar draft of international tax changes in 2011, and has said he plans to push a revision of the individual and corporate tax systems through his panel this year.

Camp held a hearing on the taxation of financial products in December 2011, in conjunction with the Senate Finance Committee.

“Today’s marketplace features a wide array of products that can result in different tax or financial accounting treatment of economically similar products, including debt, equity -- and mixtures of the two -- and financial derivatives, such as options, futures, and forward contracts and swaps,” Camp said in his opening statement at that hearing.

One of the options explored then was marking financial products to market for tax purposes. In other words, taxpayers could be charged on gains in the value of a financial instrument from year to year, even if they haven’t sold or exchanged it.

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