Flash Crash Caused Unavoidable Taxes For Investors

From "Congress, Not IRS, Must Provide Tax Relief from Flash Crash" by James Hamilton on Jim Hamilton’s World of Securities Regulation blog:

Absent the enactment of a relief provision by Congress, the IRS is not authorized to provide for the non-recognition of gain for stop-loss orders executed on the day of the flash crash in the markets, May 6, 2010. An SEC-CFTC report said that the flash crash was triggered by large trader automated sell algorithms triggered during a an unusually turbulent day for the markets. According to an IRS Information Letter, 2010-0188, various non-recognition provisions in the Code are not applicable to the situation.

Read the complete blog post here.