Page:United States Statutes at Large Volume 98 Part 1.djvu/667

 PUBLIC LAW 98-369—JULY 18, 1984

8i-4 ! T O ff

98 STAT. 619

"(ii) For purposes of determining whether subsection (e) applies to any transaction with respect to stock described in clause (ii) of subparagraph (B), all includ",{ ible corporations of an affiliated group (within the meaning of section 1504(a)) shall be treated as 1 Ante, p. 517. taxpayer."

(c) TREATMENT OF GAIN OR LOSS AND SUSPENSION OF HOLDING PERIOD WHERE TAXPAYER GRANTOR OF OPTION TO BUY STOCK.—

Section 1092 is amended by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the following new subsection:

26 USC 1092.

"(f) TREATMENT OF GAIN OR LOSS AND SUSPENSION OF HOLDING PERIOD WHERE TAXPAYER GRANTOR OF QUALIFIED COVERED CALL

OPTION.—If a taxpayer holds any stock and grants a qualified covered call option to purchase such stock with a strike price less than the applicable stock price— "(1) TREATMENT OF LOSS.—Any loss with respect to such option shall be treated as long-term capital loss if, at the time such loss is realized, gain on the sale or exchange of such stock would be treated as long-term capital gain. "(2) SUSPENSION OF HOLDING PERIOD.—Except for purposes of

section 851(b)(3), the holding period of such stock shall not include any period during which the taxpayer is the grantor of such option." (d) TREATMENT OF IDENTIFIED STRADDLES INVOLVING SECTION 1256

CONTRACTS.—Paragraph (4) of subsection (d) of section 1092 is amended to read as follows:

Ante, p. 618.

"(4) SPECIAL RULE FOR SECTION 1256 CONTRACTS.— "(A) GENERAL RULE.—In the case of a straddle

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at least 1 (but not all) of the positions of which are section 1256 contracts, the provisions of this section shall apply to any section 1256 contract and any other position making up such straddle. "(B) SPECIAL RULE FOR IDENTIFIED STRADDLES.—For purposes of subsection (a)(2) (relating to identified straddles), subparagraph (A) and section 1256(a)(4) shall not apply to a straddle all of the offsetting positions of which consist of section 1256 contracts."

(e) EFFECTIVE DATES.—

26 USC 1092

(1) IN GENERAL.—Except as otherwise provided in this subsec- "o^e. tion, the amendments made by this section shall apply to positions established after December 31, 1983, in taxable years ending after such date. (2) SPECIAL RULE FOR OFFSETTING POSITION STOCK.—In the case of any stock of a corporation formed or availed of to take positions in personal property which offset positions taken by any shareholder, the amendments made by this section shall apply to positions established on or after May 23, 1983, in taxable years ending on or after such date. (3) SUBSECTION (C).—The amendment made by subsection (c) shall apply to positions established after June 30, 1984, in taxable years ending after such date. (4) SUBSECTION (d).—The amendment made by subsection (d) shall apply to positions established after the date of the enactment of this Act in taxable years ending after such date.

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