Page:United States Statutes at Large Volume 98 Part 1.djvu/664

 98 STAT. 616

PUBLIC LAW 98-369—JULY 18, 1984 SEC. 95. LIFO CONFORMITY RULES APPLIED ON CONTROLLED GROUP BASIS.

26 USC 472.

(a) GENERAL RULE.—Section 472 (relating to last-in, flrst-out inventories) is amended by a d d i n g a t the end thereof the following new subsection: "(g) CONFORMITY RULES APPLIED ON CONTROLLED GROUP BASIS.—

"(1) IN GENERAL.—Except as otherwise provided in regulations, all members of the same group of financially related corporations shall be treated as 1 taxpayer for purposes of subsections (c) and (e)(2). "(2) GROUP OF FINANCIALLY RELATED CORPORATIONS.—For purposes of paragraph (1), the term 'group of financially related corporations' means— "(A) any affiliated group as defined in section 1504 determined by substituting '50 percent' for '80 percent' each Ante, p. 577. place it appears in section 1504(a) and without regard to section 1504(b), and r. "(B) any other group of corporations which consolidate or combine for purposes of financial statements." 26 USC 472 note. (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to taxable years beginning after the date of the enactment of this Act.

Subtitle H—Provisions Relating to Tax Straddles SEC. 101. REPEAL OF EXCEPTION FROM STRADDLE RULES FOR STOCK OPTIONS AND CERTAIN STOCK. (a) REPEAL OF EXCEPTION FOR STOCK OPTIONS.—

26 USC 1092.

(1) IN GENERAL.—Paragraph (2) of section 1092(d) (defining position) is amended to read as follows: "(2) POSITION.—The term 'position' means an interest (including a futures or forward contract or option) in personal property." (2) SECTIONS IO92 AND 263(g) NOT TO APPLY TO STRADDLES CONSISTING OF QUALIFIED COVERED CALL OPTIONS AND THE OPTIONED STOCK.—Subsection (c) of section 1092 (defining straddle)

is amended by adding at the end thereof the following new paragraph: "(4) EXCEPTION FOR CERTAIN STRADDLES CONSISTING OF QUALIFIED COVERED CALL OPTIONS AND THE OPTIONED STOCK.— "(A) IN GENERAL.—If^



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"(i) all the offsetting positions making up any straddle consist of 1 or more qualified covered call options and the stock to be purchased from the taxpayer under such options, and "(ii) such straddle is not part of a larger straddle, such straddle shall not be treated as a straddle for purposes of this section and section 263(g). "(B) QUALIFIED COVERED CALL OPTION DEFINED.—For purposes of subparagraph (A), the term 'qualified covered call option' means any option granted by the taxpayer to purchase stock held by the taxpayer (or stock acquired by the isffe taxpayer in connection with the granting of the option) but only if—

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