IRS Issues Mark-To-Market Guidance

WASHINGTON - Responding to numerous requests from brokers, banks, insurance companies and others, the IRS today issued a revenue ruling that began the process of providing substantive guidance under the new mark-to-market rules of the Internal Revenue Code. Additional guidance will be issued in the near future.

The ruling addresses several issues, including which taxpayers qualify as "dealers in securities" under the new statute and which securities may be exempt from being marked to market because they are "held for investment". The ruling also explains how affected taxpayers should make the change from their present method of accounting to the new mark-to-market method.

Taxpayers who are not sure whether they qualify as dealers were reassured that they can make "protective identifications" of their securities held for investment without increasing the likelihood that they will be treated as a dealer under the provisions.

Rev. Rul. 93-76 appears in the Internal Revenue Bulletin 1993-35, dated Nov. 8, 1993.

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