Internal Revenue Bulletin: 2009-36
September 8, 2009
Table of Contents
Section 1256 contracts marked to market. This ruling holds that ICE Futures Canada, Inc., which is a regulated exchange of Canada, is a qualified board or exchange within the meaning of section 1256(g)(7)(C) of the Code.
Is ICE Futures Canada, Inc., which is a commodity futures exchange and a self-regulatory organization of Manitoba, Canada, a qualified board or exchange within the meaning of section 1256(g)(7)(C) of the Internal Revenue Code?
Section 1256(g)(7) provides that the term “qualified board or exchange” means:
(A) a national securities exchange which is registered with the Securities and Exchange Commission,
(B) a domestic board of trade designated as a contract market by the Commodity Futures Trading Commission, or
(C) any other exchange, board of trade, or other market which the Secretary determines has rules adequate to carry out the purposes of section 1256.
The Internal Revenue Service determines that ICE Futures Canada, Inc., which is a regulated exchange of Canada, is a qualified board or exchange within the meaning of section 1256(g)(7)(C).
Under the authority of section 7805(b)(8) of the Code, this revenue ruling is effective for ICE Futures Canada Contracts (commodity futures contracts and futures contract options) entered into on or after October 1, 2009.
A change in the treatment of ICE Futures Canada Contracts to comply with this revenue ruling is a change in method of accounting within the meaning of sections 446 and 481 and the regulations thereunder. The Commissioner grants consent to taxpayers to change to the section 1256 mark to market method for the first taxable year during which the taxpayer holds an ICE Futures Canada Contract that was entered into on or after October 1, 2009. Such a taxpayer need not file a Form 3115, Application for Change in Accounting Method, and ICE Futures Canada Contracts that were entered into before October 1, 2009 will not be covered by the change in method for which consent is granted. Because the change is being made on a “cut-off” basis, there is no potential omission or duplication of income or deductions, and therefore no adjustment under section 481 is required.
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