IBOR Transition: Current Status of US Federal Tax Guidance

Interbank Offered Rates (IBORs), including the London Interbank Offered Rate (LIBOR), serve as widely accepted benchmark interest rates that represent the cost of short-​term, unsecured, wholesale borrowing by large globally active banks.

For US federal tax purposes, the main consideration for replacing an interbank offered rate (IBOR) with a fallback rate (like SOFR) is that this alteration could result in a deemed exchange of the instrument (resulting in tax implications for both the issuer and the holder of the instrument).

Our experts broke down the guidance for addressing the US federal tax consequences of replacing an IBOR with a successor rate into three areas:

  • Older rules for addressing the US tax consequences for amendments to debt in general
  • Treasury Regulations initially proposed in 2019, and
  • An IRS Revenue Procedure released in 2020

Please Note: Recordings of CLE webinars do not qualify for CLE credit.

Latest Articles

Financial Accounting Standards Board Nearing New Disclosure Rules for Joint Ventures

In August, Honda and LG Energy Solution revealed that they would be investing $4.4 billion to  develop a U.S. electric-vehicle battery factory. The a...

Justice Department to Enhance Corporate Criminal Enforcement Efforts

As the Biden administration presses for tougher white-collar compliance enforcement, the federal government appears to be using a classic carrots-and-...

Uncertainty Prompts Growing Number of Companies to Revise Revenue Guidance

The man known as “Dr. Doom” in the financial world has some typically sour news about the global economic forecast. In an interview with Bloomberg...