If you are a futures or options trader, you immediate action is required. The Senate is trying to repeal the 60/40 tax treatment of section 1256 contracts to be effective in 2004. This provision was passed without debate in the Senate as part of a package of revenue raisers for the President's Jobs and Growth Tax Relief Reconciliation Act of 2003. It is interesting to note that this was not part of the House version of the bill. The House and Senate Leadership will now appoint Members to The Conference Committee, which will meld the two versions of the bill into one for final passage by both Houses. Now, here is what we can do about this... contact your Members of Congress and urge them to go to the Conferees and oppose the repeal of Section 1256. You can find the contact information for your Senators at www.senate.gov and your Representatives at www.house.gov You need to act now since the President wants this bill passed before Memorial Day. I really don't think they understand the repercussions of this repeal as they have no provisions for changing the mark-to-market requirement of these instruments.
http://www.futuresindustry.org/fiahome-1927.asp Read the yellow box. The underlined text is a link you can click on for details. Bsulli
Possibly someone more eloquent than I could create a form letter that we could send to our representatives. In all honesty I do not know how exactly to convince our representatives that the 60/40 treatment represents the greater good but I do know that if it is repealed it is going to cost me money which I would like to avoid. Hopefully someone could write the proposed letter and post it here. Lets see if democracy works.
The amendment shown at the FuturesIndustry site would indeed strikes the paragraph (3) that lays out the 60/40. However, a search at http://thomas.loc.gov/ does not list this amendment. The senate version of the bill is S. 1054 and it does not seem to have an admentment S.A. 680. I dunno if this was just added today, and the Thomas site has not put it up yet, or whether it was removed from the bill.
I wasn't aware of this but it is precisely the kind of bookkeeper's mentality that has made the Senate bill such an odious POS. You can thank Sens. Collins and Snowe of the extremely important state of Maine for this whole mess. Sen. Frist is showing that as Majority Leader he is a darn good heart surgeon. He is so far over his head he needs an intern to help him to his seat every day. I think there is hope though. Denny Hastert the Speaker of the House is from Illinios and I doubt he will ever sign off on a deathblow aimed at Chicago like this. I was beginning to think that no bill would be preferable to the Senate bill, and now I am sure that is right.
Further, S. 1054 was discussed on the 15th (the only day it was in action on the floor so far this month), and there is no S.A. 680 listed. The author listed at the FI site is Sen. Grassley, who does have an amendment that is part of the bill (by a 86-12 vote). However, S.A. 594 has a purpose of "To amend title XVIII of the Social Security Act to enhance beneficiary access to quality health care services in rural areas under the medicare program." It doesn't have squat to do with section 1256 contracts. Link to Grassy's real amendment: http://thomas.loc.gov/cgi-bin/bdquery/z?d108:SP00594: Link to Senate calendar (pretty cool): http://frist.senate.gov/calendar/2003/
Crap - I just found this link: http://thomas.loc.gov/cgi-bin/bdquery/z?d108:SN01054:@@@L&summ2=m& (dunno if it works), but it does show a S.A. 680 by Grassley. I can't get any text from it yet .