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Regulations: Dividend equivalents from sources within the United States

Dividend equivalents from sources within the U.S.

The U.S. Treasury Department and IRS this afternoon released for publication in the Federal Register final and temporary regulations (T.D. 9815) and by cross-reference, proposed regulations (REG-135122-16) providing rules relating to dividend equivalents for purposes of section 871(m).


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The purpose of this report is to provide text of the regulations. Read the final and temporary regulations [PDF 271 KB] and the proposed regulations [PDF 197 KB]

The preamble explains that the regulations provide guidance relating to when the delta of an option that is listed on a foreign regulated exchange may be calculated based on the delta of that option at the close of business on the business day prior to the date of issuance. The temporary regulations also provide guidance identifying which party to a potential section 871(m) transaction is responsible for determining whether a transaction is a section 871(m) transaction when multiple brokers or dealers are involved in the transaction.

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