Page:United States Statutes at Large Volume 95.djvu/356

 95 STAT. 330

PUBLIC LAW 97-34—AUG. 13, 1981 "(1) DENIAL OF CAPITAL GAINS TREATMENT FOR PROPERTY IDENTIFIED AS PART OF A HEDGING TRANSACTION.—For purposGs of this

Ante, p. 323.

title, gain from any property shall in no event be considered as gain from the sale or exchange of a capital asset if such property was at any time personal property (as defined in section 1092(d)(1)) identified under subsection (e)(2)(C) by the taxpayer as being part of a hedging transaction. "(2) SUBSECTION (a)(3) NOT TO APPLY TO ORDINARY INCOME PROPERTY.—Paragraph (3) of subsection (a) shall not apply to any gain or loss which, but for such paragraph, would be ordinary income or loss." (b) CLERICAL AMENDMENT.—The table of sections for part IV of subchapter P of chapter 1 is amended by adding at the end thereof the following new item: "Sec. 1256. Regulated futures contracts marked to market.". SEC. 504. CARRYBACK OF LOSSES FROM REGULATED FUTURES CONTRACTS TO OFFSET PRIOR GAINS FROM SUCH CONTRACTS.

26 USC 1212.

Section 1212 (relating to capital loss carrybacks and carryovers) is amended by adding at the end thereof the following new subsection: "(c) CARRYBACK OF LOSSES FROM REGULATED FUTURES CONTRACTS TO OFFSET PRIOR GAINS FROM SUCH CONTRACTS.—

"(1) IN GENERAL.—If a taxpayer (other than a corporation) has a net commodity futures loss for the taxable year and elects to have this subsection apply to such taxable year, the amount of such net commodity futures loss— "(A) shall be a carryback to each of the 3 taxable years preceding the loss year, and "(B) to the extent that, after the application of paragraphs (2) and (3), such loss is allowed as a carryback to any such preceding tsixable year— "(i) 40 percent of the amount so allowed shall be treated as a short-term capital loss from regulated futures contracts, and "(ii) 60 percent of the amount so allowed shall be treated as a long-term capital loss from regulated futures contracts. "(2) AMOUNT CARRIED TO EACH TAXABLE YEAR.—The entire amount of the net commodity futures loss for any taxable year shall be carried to the earliest of the taxable years to which such loss may be carried back under paragraph (1). The portion of such loss which shall be carried to each of the 2 other taxable years to which such loss may be carried back shall be the excess (if any) of such loss over the portion of such loss which, after the application of paragraph (3), was allowed as a carryback for any prior taxable year. "(3) AMOUNT WHICH MAY BE USED IN ANY PRIOR TAXABLE

YEAR.—An amount shall be allowed as a carryback under paragraph (1) to any prior taxable year only to the extent— "(A) such amount does not exceed the net commodity futures gain for such year, and "(B) the allowance of such carryback does not increase or produce a net operating loss (as defined in section 172(c)) for such year. "(4) NET COMMODITY FUTURES LOSS.—For purposes of paragraph (1), the term 'net commodity futures loss' means the lesser of— "(A) the net capital loss for the taxable year determined by taking into account only gains and losses from regulated

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