Final regulations: Tax consequences of transition from IBOR to other rates (text of regulations)

Tax consequences of the transition away from the use of certain “interbank offered rates” (IBOR) in debt instruments, derivative contracts

Tax consequences of transition from IBOR to other rates (text of regulations)

The U.S. Treasury Department and IRS this afternoon released for publication in the Federal Register final regulations (T.D. 9961) as guidance concerning the tax consequences of the transition away from the use of certain “interbank offered rates” (IBOR) in debt instruments, derivative contracts, and other contracts.

According to the preamble, the final regulations are needed to address the possibility that a modification of the terms of a contract to replace an interbank offered rate with a new reference rate could result in the realization of income, deduction, gain or loss for federal income tax purposes or could have other tax consequences.

Read the final regulations [PDF 332 KB] (17 pages as published in the Federal Register on January 4, 2022)

The final regulations are effective March 7, 2022.

The purpose of this report is to provide text of the just-released final regulations.

 

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