Abusive Tax Shelters

Transactions of Interest

Basket Contracts (Notice 2015-48)

    A contract is entered into with a counterparty (C) to receive a return based on the performance of a notional basket of referenced assets, which may include interests in entities that trade securities, commodities, foreign currency, or similar property (“hedge fund interests”), securities, commodities, foreign currency or similar property (or positions in such property). By and through performance in the basket, as managed or overseen by Bank (Counterparty), long-term capital gains are generated.


    We are concerned that taxpayers are using basket contracts to inappropriately defer income recognition and convert ordinary income and short-term capital gain into long-term capital gain.

If you believe that you may have engaged in a transaction that is the same or substantially similar to the transaction described above, Federal law may require you to disclose your and other parties’ participation in any such “listed transaction” on IRS Form 8886. For more information, please contact us.