Camp Plan Rewrites Derivatives Taxes With Mark-To-Market

The top Republican tax writer in Congress proposed revising rules governing derivatives, replacing a complex system with a simpler one that quickly drew objections from the financial industry.

Taxpayers holding derivatives would be required to mark their holdings to market, under the discussion draft released yesterday by Representative Dave Camp, chairman of the House Ways and Means Committee. They would recognize gains and losses each year and pay taxes at ordinary income rates, regardless of whether they dispose of the asset or close out the position.