January 29, 2016, No. 2016-05. Certain investment funds that are trusts may benefit from new proposed legislation that provides relief from potentially harsh tax consequences that extends the tax loss restriction rules to trusts. Finance’s proposals, which were released January 15, 2016, clarify the type of investment fund that may be excluded from the loss restriction events that would otherwise limit a trust’s use of certain tax attributes and other related changes. Although affected investment funds may find the proposed amendments offer relief, more clarification on certain proposals would be welcome.
The proposed legislation generally implements recommendations made in a Finance comfort letter released December 2014 and appear intended to ensure that certain investments and redemptions related to these investment funds are not inadvertently caught by these rules. Specifically, the proposed legislation includes amendments to:
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