Background on Commodity Tax Straddles and Explanation of H.R. 1293: Scheduled for a Hearing by the Committee on Ways and Means on April 30, 1981

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Page 25 - Secretary, (iv) the positions are sold or marketed as offsetting positions (whether or not such positions are called a straddle, spread, butterfly, or any similar name...
Page 23 - However, section 1233 (c) exempts certain options to sell property from the phort sales rules if the option was acquired on the same day as the property and the option, if exercised, is exercised through the sale of the property. Section 1234 provides that gain or loss from the sale or exchange of an option has the same character as gain or loss from the sale or exchange of the property underlying the option, if the property were in the hands of the taxpayer. Gain or loss from closing transactions...
Page 23 - ... gain, and the holding period of the substantially identical property is generally considered to begin on the date of the closing of the short sale (sec. 1233(b)). These rules prevent a taxpayer from "aging...
Page 25 - A taxpayer holds offsetting positions with respect to personal property if there is a substantial diminution of the taxpayer's risk of loss from holding any position with respect to personal property...
Page 23 - short sale" (ie, where the taxpayer sells borrowed property and later closes the sale by repaying the lender with identical property), any gain or loss on the closing transaction is considered gain or loss from the sale or exchange of a capital asset if the property used to close the short sale is a capital asset in the hands of the taxpayer.
Page 25 - ... before you sold the first. You do not count the periods between the sale and purchase when you have no stock. Losses on short sales. Losses incurred on short sales are subject to the wash-sale rules. A loss on the closing of a short sale is denied if you sell the stock or enter into a second short sale within the period beginning 30 days before and ending 30 days after the closing of the short sale.
Page 23 - For purposes of this subtitle, in the case of futures transactions in any commodity subject to the rules of a board of trade or commodity exchange, the length of the holding period taken into account under this section or under any other section amended by section 1402 of the Tax Reform Act of 1976 shall be determined without regard to the amendments made by subsections (a) and (b) of such section...
Page 25 - For purposes of this paragraph and paragraph (7), a person is a related person to another person if — (i) the relationship between such persons would result in a disallowance of losses under section 267 or 707 (b), or (ii) such persons are members of the same controlled group of corporations (as defined in section 1563 (a), except that "more than 50 percent" shall be substituted for "at least 80 percent" each place it appears therein).

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