From: Richard Joslin -4
To: jeffrey E. <jeevacation@gmail.com>, lawrence delson
Subject: margin trade vs option
Date: Thu, 03 Jul 2014 18:28:53 +0000
Attachments: Switch_From_Treating_Basket_Transactions....pdf; CCA_201426025_-_Section_446_-
General_Rulefor Methods_of Accounting.pdf
As fyi- thought you might find of interest
Client put 10% down; broker financed 90% - economically similar to - in-the-money cash settled call option with premium
= 10% of notional. Under option, tax P&L = net cash; under financed trade, tax P&L gains, losses, expenses.
IRS challenged and treated as change in accounting method
EFTA01193902