Page:United States Statutes at Large Volume 95.djvu/354

 95 STAT. 328

Ante, pp. 323, ^^"7

PUBLIC LAW 97-34—AUG. 13, 1981 "(A) short-term capital gain or loss, to the extent of 40 percent of such gain or loss, and "(B) long-term capital gain or loss, to the extent of 60 percent of such gain or loss, and "(4) if all the offsetting positions making up any straddle consist of regulated futures contracts to which this section applies (and such straddle is not part of a larger straddle). sections 1092 and 263(g) shall not apply with respect to such straddle. "(b) REGULATED FUTURES CONTRACTS DEFINED.—For purposes of this section, the term 'regulated futures contract' means a contract— "(1) which requires delivery of personal property (as defined in section 1092(d)(l)) or an interest in such property; "(2) with respect to which the amount required to be deposited and the amount which may be withdrawn depends on a system of marking to market; and "(3) which is traded on or subject to the rules of a domestic board of trade designated as a contract market by the Commodity Futures Trading Commission or of any board of trade or exchange which the Secretary determines has rules adequate to carry out the purposes of this section. "(c) TERMINATIONS.—The rules of paragraphs (1), (2), and (3) of subsection (a) shall also apply to the termination during the taxable year of the taxpayer's obligation with respect to a regulated futures contract by offsetting, by taking or making delivery, or otherwise. For purposes of the preceding sentence, fair market value at the time of the termination shall be taken into account. "(d) ELECTIONS WITH RESPECT TO MIXED STRADDLES.—

"(1) ELECTION.—The taxpayer may elect to have this section not to apply to all regulated futures contracts which are part of a mixed straddle. "(2) TIME AND MANNER.—An election under paragraph (1) shall be made at such time and in such manner as the Secretary may by regulations prescribe. "(3) ELECTION REVOCABLE ONLY WITH CONSENT.—An election under paragraph (1) shall apply to the taxpayer's taxable year for which made and to all subsequent taxable years, unless the Secretary consents to a revocation of such election. "(4) MIXED STRADDLE.—For purposes of this subsection, the term 'mixed straddle' means any straddle (as defined in section 1092(c))— "(A) at least 1 (but not all) of the positions of which are regulated futures contracts, and "(B) with respect to which each position forming part of such straddle is clearly identified, before the close of the day on which such position is acquired, as being part of such straddle. "(e) MARK TO MARKET NOT TO APPLY TO HEDGING TRANSACTIONS.— "(1) SECTION NOT TO APPLY.—Subsection (a) shall not apply in

the case of a hedging transaction. "(2) DEFINITION OF HEDGING TRANSACTION.—For purposes of

this subsection, the term 'hedging transaction' means any transaction i— f • "(A) such transaction is entered into by the taxpayer in the normal course of the taxpayer's trade or business primarily—

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