Page:United States Statutes at Large Volume 72 Part 1.djvu/1686

 1644

26 USC 1233.

26 USC 1234.

26 USC 1221.

26 USC 1233.

26 USC 1235.

26 USC 267.

PUBLIC LAW 86-866-SEPT. 2, 1968

[72 S T A T.

or any evidence of an interest in, or right to subscribe to or purchase, any of the foregoing." (b) HEDGING TRANSACTIONS.—Section 1233(a) (relating to gains and losses from short sales) is amended by striking out ", other than a hedging transaction in commodity futures,". Section 1233 is amended by adding after subsection (f) the following new subsection: " (g) HEDGING TRANSACTIONS.—This section shall not apply in the case of a hedging transaction in commodity futures." (c) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply with respect to short sales made after December 31, 1957. SEC. 53. OPTIONS TO BUY OR SELL. Section 1234 (relating to options to buy or sell) is amended to read as follows: "SEC. 1234. OPTIONS TO BUY OR SELL. " (a) TREATMENT OF G A I N OR Loss.—Gain or loss attributable to the sale or exchange of, or loss attributable to failure to exercise, a privilege or option to buy or sell property shall be considered gain or loss from the sale or exchange of property which has the same character as the property to which the option or privilege relates has in the hands of the taxpayer (or would have in the hands of the taxpayer if acquired by him). " (b) SPECIAL RULE FOR Loss ATTRIBUTABLE TO FAILURE TO EXERCISE OPTION.—For purposes of subsection (a), if loss is attributable to failure to exercise a privilege or option, the privilege or option shall be deemed to have been sold or exchanged on the day it expired. "(c) NON-APPLICATION OF SECTION.—This section shall not apply to— "(1) a privilege or option which constitutes property described in paragraph (1) of section 1221; "(2) m the case of gain attributable to the sale or exchange of a privilege or option, any income derived in connection with such privilege or option which, without regard to this section, is treated as other than gain from the sale or exchange of a capital asset; "(3) a loss attributable to failure to exercise an option described in section 1233(c); or "(4) gain attributable to the sale or exchange of a privilege or option acquired by the taxpayer before March 1, 1954, if in the hands of the taxpayer such privilege or option is a capital asset." SEC. 54. SALE OR EXCHANGE OF PATENTS. (a) APPLICATION I N CASE OF RELATED PERSONS.—Section 1235(d)

(relating to sale or exchange of patents between related persons) is amended to read as follows: " (d) RELATED PERSONS.—Subsection (a) shall not apply to any transfer, directly or indirectly, between persons specified within any Qne of the paragraphs of section 267(b); except that, in applying section 267(b) and (c) for purposes of this section— " (1) the phrase '25 percent or more' shall be substituted for the phrase 'more than 50 percent' each place it appears in section 267 (b), and "(2) paragraph (4) of section 267(c) shall be treated as providing that the family of an individual shall include only his spouse, ancestors, and lineal descendants." (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply with respect to taxable years ending after the date of the enactment of this Act, but only with respect to transfers after such date.

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