IRS T.D.: Base Erosion, Anti-Abuse Tax Rules for Qualified Derivative Payments on Securities Lending Transactions (I.R.C. §§59A, 6038A)

The IRS published final regulations regarding the base erosion and anti-abuse tax (BEAT) imposed on large corporate taxpayers with respect to payments made to foreign related parties. The final regulations establish how qualified derivative payments with respect to securities lending transactions are determined and reported. Key provisions include: 1) rules that mark-to-market gains and losses on the securities leg of securities lending transactions are not treated as qualified derivative payments; 2) methods for determining substitute payments made to foreign related parties; and 3) clarifications on reporting requirements. The final rule takes effect Dec. 18. [TD 10041, RIN 1545-BR20, (Dec. 18, ...