Page:United States Statutes at Large Volume 98 Part 1.djvu/676

 98 STAT. 628 26 USC 1092

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Ante, p. 627. 26 USC 1092

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26 USC 1256.

PUBLIC LAW 98-369—JULY 18, 1984 (b) REQUIREMENT THAT REGULATIONS B E ISSUED WITHIN 6 MONTHS

AFTER THE DATE OF ENACTMENT.—The Secretary of the Treasury or

his delegate shall prescribe initial regulations under section 1092(b) of the Internal Revenue Code of 1954 (including regulations relating to mixed straddles) not later than the date 6 months after the date of the enactment of this Act. (c) EFFECTIVE DATE OF REGULATIONS WITH RESPECT TO MIXED

STRADDLES.—The regulations described in subsection (b) with respect to the application of section 1233 of the Internal Revenue Code of 1954 to mixed straddles shall not apply to mixed straddles all of the positions of which were established before January 1, 1984. SEC. 104. LIMITATION ON LOSSES FROM HEDGING TRANSACTIONS. (a) GENERAL RULE.—Subsection (e) of section 1256 (relating to mark to market not to apply to hedging transactions) is amended by adding at the end thereof the following new paragraph: "(5) LIMITATION ON LOSSES FROM HEDGING TRANSACTIONS.— "(A) IN GENERAL.—

"(i) LIMITATION.—Any hedging loss for a taxable year which is allocable to any limited partner or limited entrepreneur (within the meaning of paragraph (3)) shall be allowed only to the extent of the taxable income of such limited partner or entrepreneur for such taxable year attributable to the trade or business in which the hedging transactions were entered into. For purposes of the preceding sentence, taxable income shall be determined by not taking into account items attributable to hedging transactions. "(ii) CARRYOVER OF DISALLOWED LOSS.—Any hedging loss disallowed under clause (i) shall be treated as a deduction attributable to a hedging transaction allowable in the first succeeding taxable year. "(B) EXCEPTION WHERE ECONOMIC LOSS.—Subparagraph

(A)(i) shall not apply to any hedging loss to the extent that such loss exceeds the aggregate unrecognized gains from hedging transactions as of the close of the taxable year attributable to the trade or business in which the hedging transactions were entered into. "(C) EXCEPTION FOR CERTAIN HEDGING TRANSACTIONS.—In

26 USC 1256 note.

the case of any hedging transaction relating to property other than stock or securities, this paragraph shall apply only in the case of a taxpayer described in section 465(a)(1). "(D) HEDGING LOSS.—The term 'hedging loss' means the excess of— "(i) the deductions allowable under this chapter for the taxable year attributable to hedging transactions (determined without regard to subparagraph (A)(i)), over "(ii) income received or accrued by the taxpayer during such taxable year from such transactions. "(E) UNRECOGNIZED GAIN.—The term 'unrecognized gain' has the meaning given to such term by section 1092(a)(3)." (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 1984.

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