Financial Products & Transactions
Taxpayers frequently enter into complex financial transactions subject to complex tax accounting rules including swaps, distressed debt and mortgage-backed securities. Andersen Tax professionals are experienced in modeling the tax treatment of such investments and assisting taxpayers (and their auditors) in analyzing these transactions for federal tax as well as state and local income tax purposes. We also represent taxpayers in tax controversies involving complex financial transactions.
Andersen Tax professionals help clients find practical solutions to complex issues arising from investments in sophisticated financial instruments. Our professionals draw upon their collective experience from public accounting, large law firms and the government to help clients develop tax positions which achieve their objectives. We work to ensure that the positions developed are consistent with the tax policy objectives of the legislative and regulatory framework that may apply.
Some areas of our expertise include:
Calculation of Income from Fixed Income Securities
The federal tax laws require taxpayers to apply special rules to account for original issue discount, bond premium, market discount and other types of bond income. Andersen Tax can determine the correct amount of income or expense arising from an investment in a wide variety of debt securities including distressed debt and mortgage-backed securities.
Determination of Securities Dealer or Trader Status
Under the federal tax laws, traders and dealers in securities or commodities are subject to special mark-to-market accounting rules. Andersen Tax is experienced in applying these rules and quantifying the tax consequences of dealer or trader status and of various tax elections available to taxpayers who transact in equity, debt or other securities. Our valuation professionals can also assist taxpayers in documenting the fair market value of items subject to the mark-to-market rules.
Compliance with U.S. Withholding Tax Rules
A wide variety of investment income paid to non-U.S. investors is subject to complex federal withholding tax and information reporting rules. Andersen Tax professionals are experienced in assisting taxpayers in determining the amount of income subject to U.S. withholding tax and the appropriate method of reporting such income to IRS.
Taxation of International Banks
International banks that do business in the U.S. are subject to a myriad of special federal tax rules including those governing the attribution of income and allocation of interest expense. Andersen Tax professionals are experienced in advising foreign-based financial institutions on the application of these rules to minimize their federal and state tax liabilities.
Passive Foreign Investment Compliance and Planning
Investments in non-U.S. funds may be subject to an onerous and complex tax regime if such funds are passive foreign investment companies (PFICs). Andersen Tax has deep experience in modeling the tax treatment of prospective PFIC investments and of various elections available with respect to such investments. We also assist taxpayers in calculating income from their PFIC investments including any deferred interest charges.