[FutureCPAin2014]

Hi – I need help with a couple questions please!!! Thank you in advance 🙂

1) Blake Co. files a consolidated return with its parent company. Blake Co. has various futures contracts outstanding at the end of the year. Assume all of the outstanding contracts are hedges under Sec.1221(a)(7). How are they taxed, if at all, at the end of the year?

2) On 9/1/16 the CEO of Blake Co. purchases a contract for $10K. The contract has a value of $15K on 12/31/2016. On 1//20/2017, he closes out his position when the contract has a value of $14K. What are the federal income tax consequences of these transactions?

[Namstut]

@FutureCPAin2014,
You will get a better luck getting answers to your questions if you post in the study group forum.

AUD 7/6/16 Passed
BEC 9/3/16
FAR TBD
REG TBD

[Author]

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