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On January 24, 2013, the Chairman of the U.S. House Ways and Means Committee issued a discussion draft of proposed legislation that would reform the taxation of financial products, including debt instruments and derivative transactions. These proposals could materially impact the taxation of investments held by hedge funds and other private investment funds. Specific proposals include modifying tax rules to provide for uniform tax treatment of financial derivatives, allowing an identification of a hedge for accounting purposes to control for tax purposes, eliminating the phantom tax resulting from debt restructurings, requiring current inclusion of market discounts, requiring the use of average basis to determine gain or loss from the sale of securities, and expanding the wash sale rules. Please join Sutherland attorneys Robb Chase and David Roby for a Quick Call to discuss these proposals and the implications they may have for sponsors of, and investors in private funds.