United States

IRS issues guidance on Wash Sale Rules for Money Market Funds


The IRS, in response to Securities and Exchange Commission rules that change how some money market fund shares are priced, has issued guidance describing when the IRS will not treat a redemption of shares in a money market fund as part of a wash sale under section 1091.

The IRS and the Treasury issued Rev Proc 2014-45 which exempts losses from redemptions of floating-NAV MMF shares as part of a wash sale under 1091 since values are relatively stable and because of the administrative burdens associated with applying section 1091 to shares in floating-NAV MMFs.  Therefore, section 1091(a) will not disallow the deduction for the resulting loss in the year realized, section 1091(d) will not cause the basis of any property to be determined by reference to the basis of the redeemed shares. 

Read the full proposed regulations.

For more information contact Joe Palombo at 617.241.1493 or Sarah Shaw at 617.241.1271.