Rev. Rul. 86-7 is obsoleted.

PROSPECTIVE APPLICATION

Under the authority of § 7805(b)(8), this revenue ruling is effective for MX Contracts entered into on or after November 1, 2024. In the preceding sentence, the term “MX Contracts” means futures contracts and futures contract options that are traded on or subject to the rules of MX, that are described in § 1256(g)(1)(A), and

that are not covered by the exception in § 1256(b)(2).

Under the authority of § 7805(b)(8), the IRS will not challenge a position taken prior to November 1, 2024, with respect to a transaction occurring prior to such date, by a taxpayer that reasonably relied on the conclusion in Rev. Rul. 86-7.

CHANGE IN METHOD OF ACCOUNTING

A change in the treatment of MX Contracts to comply with this revenue ruling is a change in method of accounting within the meaning of §§ 446 and 481 and the regulations thereunder. The Commissioner grants consent to a taxpayer to change its method of accounting for MX Contracts entered into on or after November 1, 2024, to the § 1256 mark-to-market method for the first taxable year during which the taxpayer holds such contracts. The requirement to file a Form 3115, Application for Change in Accounting Method, in § 1.4461(e)(3)(i) of the Income Tax Regulations is waived. The change is made on a cut-off basis and is inapplicable to MX Contracts that were entered into before November 1, 2024. Because the change is made on a “cut-off” basis, there is no potential omission or duplication of income or deductions, and an adjustment under § 481 is neither permitted nor required.

DRAFTING INFORMATION

The principal author of this revenue ruling is Jonathan A. LaPlante of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue ruling, contact Jonathan A. LaPlante at (202) 317-5102 (not a toll-free number).

1 Unless otherwise specified, all “Section” or “§” references are to sections of the Code.

October 21, 2024 980 Bulletin No. 2024–43

Section 1256.—Section 1256 Contracts Marked to Market

(Also §§ 446, 481, 7805, 1.446-1, 301.7805-1).