On 31 January 2017, the U.S. IRS published an international practice unit on basket transactions. A basket transaction is a type of structured financial transaction in which a taxpayer attempts to defer and treat ordinary income and short-term capital gain as long-term capital gain through a contract denominated as an option, notional principal contract, forward contract or other derivative contract. Basket Transactions typically involve a hedge fund or a high net-worth individual and the IRS is concerned that taxpayers may be using such transactions inappropriately. The practice unit covers two notices issued by the IRS in 2015 to address these...