Page:United States Statutes at Large Volume 98 Part 1.djvu/677

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 629

SEC. 105. CLARIFICATION THAT SECTION 1234 APPLIES TO OPTIONS ON REGULATED FUTURES CONTRACTS AND CASH SETTLEMENT OPTIONS.

(a) GENERAL RULE.—Section 1234 (relating to options to buy or sell) is amended by adding at the end thereof the following new subsection: "(c) TREATMENT OF OPTIONS ON SECTION 1256 CONTRACTS AND CASH SETTLEMENT OPTIONS.— "(1) SECTION 1256 CONTRACTS.—Gain or loss shall be recog-

nized on the exercise of an option on a section 1256 contract (within the meaning of section 1256(b)).

26 USC 1234.


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Ante, p. 620.

"(2) TREATMENT OF CASH SETTLEMENT OPTIONS.—

"(A) IN GENERAL.—For purposes of subsections (a) and (b), a cash settlement option shall be treated as an option to buy or sell property. -f»b

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"(B) CASH SETTLEMENT OPTION.—For purposes of subpara-

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graph (A), the term 'cash settlement option' means any option which on exercise settles in (or could be settled in) cash or property other than the underlying property." (b) EFFECTIVE DATE.—The amendment made by subsection (a) 26 USC 1234 shall apply to options purchased or granted after October 31, 1983, note. in taxable years ending after such date. SEC. 106. WASH SALE RULES TO APPLY TO LOSSES ON CERTAIN SHORT SALES. (a) IN GENERAL.—Section 1091 (relating to losses from wash sales 26 USC 1091. of stock or securities) is amended by adding at the end thereof the following new subsection: „,. "(e) CERTAIN SHORT SALES OF STOCK OR SECURITIES.—Rules similar

to the rules of subsection (a) shall apply to any loss realized on the closing of a short sale of stock or securities if, within a period beginning 30 days before the date of such closing and ending 30 days after such date— "(1) substantially identical stock or securities were sold, or "(2) another short sale of substantially identical stock or securities was entered into."

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(b) LOSSES FROM WASH SALES ONLY IN CASE OF DEALER LOSSES.—

Section 1091(a) (relating to disallowance of loss deduction for wash sales) is amended by striking out all that follows "then" and inserting in lieu thereof "no deduction shall be allowed under section 165 unless the taxpayer is a dealer in stock or securities and the loss is sustained in a transaction made in the ordinary course of such business." (c) EFFECTIVE DATE.— 26 USC I09i (1) SUBSECTION (a).—The amendment made by subsection (a) ^°^shall apply to short sales of stock or securities after the date of the enactment of this Act in taxable years ending after such date. (2) SUBSECTION (b).—The amendment made by subsection (b) shall apply to sales after December 31, 1984, in taxable years ending after such date. SEC. 107. TIME FOR IDENTIFICATION BY TAXPAYER OF CERTAIN TRANSACTIONS. (a) IDENTIFIED STRADDLES.—Clause (i) of section 1092(a)(2)(B) (defm- 26 USC 1092. ing identified straddles) is amended to read as follows:

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