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S 4331·Federal·senate

Modernization of Derivatives Tax Act of 2026

In CommitteeFiled Apr 16, 2026
Sponsor: Sen. Wyden, Ron [D-OR] (D)
Latest Action

Read twice and referred to the Committee on Finance.

Apr 16, 2026

Summary

The bill changes the Internal Revenue Code so that any taxable event involving a derivative or its underlying asset is recognized in the year it occurs and is taxed as ordinary income tied to the taxpayer’s trade or business. It also creates special rules for investment hedging units, including how built‑in gains and losses are handled, and provides transition guidance for REITs that add certain debt instruments. The goal is to bring tax treatment of modern financial contracts in line with current market practices.

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