Curriculum Guide · Courses

Professors Garlock, Gibian, and M. Shulman

LL.M Course 953 (cross-listed) | 3 credit hours

This course will consist of two parts. The first part will present an in-depth analysis of the federal income taxation of debt instruments, with a focus on computational issues and techniques. For this part, students are required to bring a laptop to class with Microsoft Excel (or comparable spreadsheet program) installed. Topics covered in this part will include: basic interest and original issue discount rules; market discount and premium; convertibles, exchangeables and investment units; coupon stripping mortgage-backed securities; variable rate and contingent debt instruments; high-yield discount obligations; and foreign currency denominated debt instruments. During this part of the course, there will be several required homework assignments.

The second part of the course will focus on real world examples of recent complex financial transactions with a particular emphasis on both the transactions' economic terms and the associated tax consequences. Topics covered in this part will include: debt-equity issues; convertible bonds (including those treated as contingent debt instruments); bond-warrant investment units; mandatory convertible units; variable prepaid forward contracts; and exchange-traded notes.

Students will be expected to have a working knowledge of the taxation of financial transactions. Qualified JD students are welcome to participate in the course. Class participation will be expected.

Prerequisite: (1) Basic Taxation of Debt Instruments Course or solid background in the subject matter. Strongly Recommended: basic familiarity with spreadsheet program; and ability to deal in depth with quantitative issues.