Q2 2019 started out with a great deal of hope in the world of capital markets taxation. We were greatly looking forward to the US Supreme Court granting certiorari in Estate of McKelvey v. Comm’r and ultimately helping tax practitioners understand how to apply some fairly complicated Internal Revenue Code (the “Code”) sections including sections 1234A and 1259 of the Code. Unfortunately, the quarter ended not with a bang but a whimper, when the Supreme Court denied certiorari in McKelvey. Accordingly, we are left with the Second Circuit decision in McKelvey, which among other things, finds that an obligation on a variable pre-paid forward contract (“VPFC”) is not “property” for purposes of section 1001 of the Code and also that whether the number of shares in a VPFC is “substantially fixed” can be based on a probability analysis (in McKelvey the probability that there would be any variation was less than 15%). Unfortunately, McKelvey’s estate will end up back in Tax Court to figure out the amount of tax actually owed.