Libor Phaseout Rule Under White House Review

The White House’s regulatory review office has begun reviewing final rules (RIN 1545-BO91) that ensure that companies won’t face capital gains tax when they alter loan and derivative contracts to comply with the global phaseout of the London Interbank Offered Rate and other interbank offered rates.

Companies expect a massive undertaking to amend hundreds of trillions of dollars worth of contracts with references to Libor and other interbank rates to insert new benchmark interest rates. In the proposed rules, the Internal Revenue Service said such contract modifications will not be subject to capital gains tax under tax code Section 1001 ...