Not long after the SEC approved new money fund rules, requiring some institutional funds to lose their $1 share price for a floating NAV, the IRS is getting involved.

The IRS is proposing a change in tax rules that would exempt small losses on the sale of money fund shares from the wash-sale rule, Bloomberg Businessweek's Carla Main reported.

The wash-sale rule prevents investors from recognizing a loss when selling a security if they repurchase the same security within 30 days.

It's far from an ideal solution for the mutual fund industry, however. The industry fought against a floating NAV, which they argued would impose record keeping burdens by making all transactions—be they small or big gains, or losses—taxable.

To read more, click here. 

Edited by: Casey Quinlan


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