The AICPA has written a letter to the IRS requesting that the agency protect certain small businesses that are deemed to be syndicates from the loss of various small business benefits provided in the Tax Cuts and Jobs Act.

In the case of Wright v. Commissioner, 117 AFTR 2d ¶ 2016-319 the Sixth Circuit Court of Appeals reversed the holding of the Tax Court holding that an over the counter foreign currency option in a major currency is not a §1256 contract (TC Memo 2011-292).

The issue was of import because if it wasn’t, then the taxpayer would not be allowedloss created by a major-minor tax shelter.  The shelter involved two pair of options that were designed to offset each other, but due to the requirement that §1256 options be marked to market, the taxpayer recognizes the loss inherent in that loss (which is a major currency OTC option) but not the gain inherent on the offsetting option (the minor option).