Investor Glossary-section 988Investor Glossary-section 988Investor Glossary-section 988Investor Glossary-section 988Insightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Section 988

The HTML to link to this page
 

A section 988 refers to a tax rule governing capital gains or losses on investments held in a foreign currency. The section 988 rule went into effect on January 1, 1987. Transactions covered by section 988 include those associated with the interest and principle received on foreign bonds, foreign currency futures, and expenses or receipts accrued in a foreign currency. Euro-denominated bonds issued by a U.S. bank are also considered a section 988 transaction. Foreign exchange positions, futures, and international bonds are the instruments most commonly affected by section 988 rules. Whether earned by individuals or corporations, federal tax authorities treat most capital gains under section 988 as ordinary income. However, in some cases involving forward contracts, futures, and options wherein an investor makes an election before entering into the transaction, a section 988 transaction may be taxed as a capital gain. Section 988 gains and losses are treated separately from gains and losses arising from changes in currency valuations.



Rate this Section 988 definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: inflation, EBITDA, average price per share, current ratio, FTSE, 1035 exchange, LIBOR, annual return, deferred revenue, option premium, 401a, command economy, open position, real GDP, implied volatility, in escrow, quality assurance, cancelled check, dividends payable, covered put, stock split, 1031 exchange, class C shares, required rate of return, ex-dividend, limit order, risk management, Zero Cost Collar, reverse mortgage, minority interest, VIX, deferred tax, Key Rate Duration, margin rate, wholly-owned subsidiary, APR, 144a, diluted share, stock market close, FICO score, ex-dividend date, phantom income, per diem, debt service coverage, balance sheet, retained earnings, irrevocable trust, labor relations, liquidity ratio


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use