Special rules would prevent use of these transactions to create foreign tax credit opportunities. In addition, there would be exceptions to the deemed-financing result for cases involving a purported strip of substantially all of the value of the underlying property or in which the financing result would not clearly reflect income. Require ordinary treatment for certain dealers of equity options and commodities . Prohibit tax deferral on contributions of appreciated property to swap funds . This proposal has two components.
Corporate provisions Treat receipt of certain tracking stock as property .
Under this proposal, a shareholder's receipt of tracking stock in certain distributions and exchanges generally would be taxable. This proposal is modified from the proposal last year that would have treated the issuance of tracking stock as triggering a corporate level tax based on the gain inherent in the tracked assets. Modify tax treatment of certain reorganizations where portfolio interests in stock disappear . Clarify definition of nonqualified preferred stock . Allow RICs a dividends paid deduction for redemptions only in cases where the redemption represents a contraction in the RIC .