Omri Marian and Andrew Moin Author Article on Taxation of Structured Debt in a Low-Rate Environment

April 2012

Mr. Marian and Mr. Moin published the article, “Taxation of Structured Debt in a Low-Rate Environment” in the April 16 edition of Tax Notes. The article discusses the taxation of special types of debt-instruments characteristic of a low market rate environment, including fixed-to-floating rate instruments, range accrual debt instruments and callable step-up instruments. The authors note several ambiguities in the regulations regarding variable-rate, and contingent payment debt instruments and call for clarification. They also explore some counterintuitive results of the technical operation of the regulations and argue that a possible explanation may be that the regulations were drafted during times of different market characteristics.