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TREAS/IRS RIN: 1545-BB90 Publication ID: Spring 2003 
Title: ●Guidance Regarding Mark-to-Market Valuation for Certain Securities 
Abstract: Section 475(a) requires that dealers in securities must mark their securities to market. If the security is inventory, the dealer must include that security at fair market value. Taxpayers must treat any securities that are not inventory as if they were sold for its fair market value on the last business day of the year. While the legal definition of the term "fair market value" has long been settled, the statute is silent as to what valuation methodology should be used to determine fair market value of any particular security. Many of the securities subject to section 475 raise difficult valuation issues. This advanced notice of proposed rulemaking is asking for comments on rules and standards that the IRS is considering using a financial statement-tax conformity approach for valuing certain securities under section 475 for which the determination of actual fair market value is administratively difficult. The rules will include: (1) the securities to which this approach applies; (2) the taxpayers who may elect this approach; (3) the election into the approach; (4) the applicable financial statements to be used; (5) the record-keeping, retention, and availability requirements for verification of financial statement-tax conformity; and (6) what approach will apply if the election for financial statement-tax conformity is not made. 
Agency: Department of the Treasury(TREAS)  Priority: Substantive, Nonsignificant 
RIN Status: First time published in the Unified Agenda Agenda Stage of Rulemaking: Prerule Stage 
Major: No  Unfunded Mandates: No 
CFR Citation: 26 CFR 1   
Legal Authority: 26 USC 7805    26 USC 475    26 USC 446   
Legal Deadline:  None
Timetable:
Action Date FR Cite
ANPRM  06/00/2003    
Additional Information: REG-100420-03 Drafting attorney: Marsha A. Sabin (202) 622-3950 Reviewing attorney: Robert Williams (202) 622-3960 Treasury attorneys: Michael Novey (202) 622-1339 and Viva Hammer (202) 622-0869 CC:FIP
Regulatory Flexibility Analysis Required: Undetermined  Government Levels Affected: None 
Small Entities Affected: No  Federalism: No 
Included in the Regulatory Plan: No 
Agency Contact:
Marsha A. Sabin
Department of the Treasury
Internal Revenue Service
1111 Constitution Avenue NW., Room 3547,
Washington, DC 20224
Phone:202 317-6945
Fax:855 574-9025
Email: marsha.a.sabin@irscounsel.treas.gov