Treasury releases guidance on qualified derivative payments for BEAT purposes

What happened?

Treasury and the IRS on January 10, 2025, released proposed regulations regarding the base erosion and anti-abuse tax (BEAT) rules (2025 proposed regulations). The 2025 proposed regulations relate to how qualified derivative payments (QDPs) with respect to securities lending transactions are determined and reported.

Why is it relevant?

The proposed regulations would modify how to determine QDPs for securities lending transactions for purposes of the BEAT and defer the QDP reporting requirement.

The proposed regulations would apply to tax years beginning on or after the date that final regulations are published in the Federal Register with specific rules for QDP reporting to apply to tax years beginning on or after January 1, 2027.

Actions to consider

Taxpayers should consider providing comments on the proposed regulations as well as comments on potential updates to Form 8991 or related schedules. Comments on the proposed regulations are due by April 14, 2025.