Regulations: Effective date for certain broker reporting is extended to 2016

Effective date for certain broker reporting

The Treasury Department and IRS today released for publication in the Federal Register a correction to temporary regulations (released in March 2015) relating to reporting of certain information by brokers for transfers of debt instruments that are covered securities. The correction effectively postpones the effective date of the provisions of the temporary regulations requiring such reporting for transfers that occur on or after January 1, 2016.

Related content

Originally, the March 2015 temporary regulations were intended to require reporting of certain information on a transfer statement effective for transfers of debt instruments that are covered securities on or after June 30, 2015. However, according to today’s release, the extended effective date is made in response to requests for additional time for this reporting. Read today’s correction [PDF 199 KB] to T.D. 9713

Background

The temporary regulations (T.D. 9713) and, by cross-reference, proposed regulations (REG-143040-14) were issued in March 2015 concerning information reporting by brokers for:

  • Bond premium and acquisition premium
  • Transactions involving debt instruments and options, including:
    • The reporting of original issue discount (OID) on tax-exempt obligations
    • The treatment of certain holder elections for reporting a taxpayer’s adjusted basis in a debt instrument

Transfer reporting for section 1256 options and debt instruments

Previously, a broker did not have to provide a transfer statement for a section 1256 option, and did not have to provide the last date on or before the transfer date that the broker made an adjustment for a particular item relating to a debt instrument.

The March 2015 temporary regulations include provisions that require a broker to transfer this information for a section 1256 option transferred on or after January 1, 2016, and for a debt instrument transferred on or after June 30, 2015.

© 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Request for proposal

 

Submit

KPMG's new digital platform

KPMG's new digital platform