The IRS has ruled that the capital gains tax advantage enjoyed by exchange traded notes may soon come to an end, Jesse Drucker reports in today's Wall Street Journal Fund Track column. Income from foreign currency ETNs, according to the ruling, should be treated as debt for tax purposes, therefore taxed at ordinary rates. In a separate notice, the IRS and Treasury opened the door to ending tax benefits on "prepaid forward contracts", which ETNs fall under. According to a notice the government organizations are looking into whether" such a transaction should be required to accrue income/expense during the term of the transaction." 

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