Taxation of Financial Instruments

NOTE: The completion of the Federal Income Taxation course is a pre-requisite for Taxation of Financial Instruments.

After exploring the tax treatment of familiar investments such as common stock and fixed-rate debt, and of traditional derivatives such as options and forwards, the course considers the host of new financial instruments that have emerged in the markets in recent decades. These instruments include contingent debt, contingent swaps, contingent convertibles, prepaid forwards, and so on. These financial instruments raise novel tax questions while offering taxpayers new ways to reduce tax liability. The government has responded to the emergence and proliferation of these instruments with new rules that close some loopholes but establish new and unique tax regimes, adding complexity to the law. The course will survey this evolving body of tax law, and provide a critical assessment of the government's ability to respond effectively to financial innovation.

Any LLM students who would like to take this class must talk to Professor Alex Raskolnikov ([email protected]).