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New guidance issued on Fannie and Freddie stock The Treasury Department and the Internal Revenue Service issued guidance indicating that certain gains and losses from indirect ownership of Fannie Mae and Freddie Mac preferred stock can be treated as ordinary income and loss. Many financial institutions indirectly invested in Fannie and Freddie preferred stock through adjustable rate preferred programs and other vehicles. The Emergency Economic Stabilization Act of 2008 authorized ordinary treatment for direct investments in preferred stock but asked Treasury to follow up with guidance on indirect investments. That guidance was issued and . . .

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