BNA INSIGHTS: Section 1256 and Exchange-Traded Currency Options

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Curtiss Martin and Jon Zelnik of KPMG LLP's Washington National Tax practice look at the Tax Court's recent decision in Summitt v. Commissioner, which upheld IRS's position that an over-the-counter option on foreign currency was not a Section 1256 contract and was not marked to market when the taxpayer gave the option to a charity and claimed a loss. The authors discuss the case and what it might mean for taxpayers.