In a Cadwalader memorandum, Cadwalader attorneys discussed IRS Notice 2016-76, which phases in the application of rules concerning withholding on dividend equivalent payments under IRS section 871(m). The attorneys also provided a summary of the Notice.
Withholding applies only to delta-one transactions in 2017, and to other U.S. equity transactions after 2017. A delta-one transaction tracks the underlying asset on a dollar-for-dollar basis. The memorandum was authored by Jean Bertrand, Brian Foster, Mark Howe, Steven Lofchie, Jason Schwartz, Ray Shirazi and Edward Wei. For a comprehensive discussion of IRS section 871(m), see this prior Clients & Friends Memorandum.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
