January 6, 2022
IRS finalizes rules addressing the tax consequences of the elimination of LIBOR and other interbank offered rates
The IRS has issued final regulations (TD 9961) providing guidance on the tax consequences of the transition away from using certain interbank offered rates (IBORs) in debt instruments, derivative contracts and other contracts. The preamble states the regulations are necessary to address the possibility that a change in a contract's terms to replace an IBOR with a new reference rate could affect the realization of income, deduction, gain or loss for federal tax purposes. (Tax Alert 2019-1804 highlights the proposed regulations.) A Tax Alert is forthcoming.