Document Type
Article
Publication Title
University of Miami Law Review
Abstract
Derivative financial instruments are, for many persons, shrouded in mystery. Although news of such instruments frequently appears in the financial press, from the Nick Leeson affair to recent disputes involving Bankers Trust and Merrill Lynch, the features of these instruments are rarely described. Usually derivatives are characterized as complex or arcane, the characterization apparently serving to justify the failure to explain. The unfortunate effect, enhanced by oblique financial jargon, has been tall barriers to analysis of these common financial tools. It is not necessary to understand everything about derivative financial instruments to understand the tax issues that such instruments involve. Nor are derivatives so radically different from other long-existing economic transactions as to require a complete set of new tax rules. What does seem true-in a variety of tax areas-is that derivative financial instruments and the many sophisticated ways in which they can be employed place considerable pressure upon established tax definitions and categories. This forces tax policymakers and taxpayers alike to re-examine the bases for long-accepted distinctions. One area that needs such reexamination is international taxation, where derivative transactions cross borders.
First Page
597
Volume
50
Publication Date
1996
Recommended Citation
H. D. Rosenbloom,
Source-Basis Taxation of Derivative Financial Instruments: Some Unanswered Questions,
50
University of Miami Law Review
597
(1996).
Available at:
https://gretchen.law.nyu.edu/fac-articles/975
