For purposes of this subtitle, the term "capital asset" means property held by the taxpayer (whether or not connected with his trade or business), but does not include-
For purposes of subsection (a)(6)-
The term "commodities derivatives dealer" means a person which 1 regularly offers to enter into, assume, offset, assign, or terminate positions in commodities derivative financial instruments with customers in the ordinary course of a trade or business.
The term "commodities derivative financial instrument" means any contract or financial instrument with respect to commodities (other than a share of stock in a corporation, a beneficial interest in a partnership or trust, a note, bond, debenture, or other evidence of indebtedness, or a section 1256 contract (as defined in section 1256(b))), the value or settlement price of which is calculated by or determined by reference to a specified index.
The term "specified index" means any one or more or any combination of-
which is based on any current, objectively determinable financial or economic information with respect to commodities which is not within the control of any of the parties to the contract or instrument and is not unique to any of the parties' circumstances.
For purposes of this section, the term "hedging transaction" means any transaction entered into by the taxpayer in the normal course of the taxpayer's trade or business primarily-
Notwithstanding subsection (a)(7), the Secretary shall prescribe regulations to properly characterize any income, gain, expense, or loss arising from a transaction-
At the election of the taxpayer, paragraphs (1) and (3) of subsection (a) shall not apply to musical compositions or copyrights in musical works sold or exchanged by a taxpayer described in subsection (a)(3).
The Secretary shall prescribe such regulations as are appropriate to carry out the purposes of paragraph (6) and (7) of subsection (a) in the case of transactions involving related parties.
1 So in original. Probably should be "who".
26 U.S.C. § 1221
EDITORIAL NOTES
AMENDMENTS2017-Subsec. (a)(3). Pub. L. 115-97 inserted "a patent, invention, model or design (whether or not patented), a secret formula or process," before "a copyright" in introductory provisions. 2010-Subsec. (a)(3)(C). Pub. L. 111-312 amended subsec. (a)(3)(C) to read as if amendment by Pub. L. 107-16, §542(e)(2)(A), had never been enacted. See 2001 Amendment note below. 2006-Subsec. (b)(3). Pub. L. 109-432 struck out "before January 1, 2011," after "exchanged". Pub. L. 109-222 added par. (3). Former par. (3) redesignated (4).Subsec. (b)(4). Pub. L. 109-222 redesignated par. (3) as (4). 2002-Subsec. (b)(1)(B)(i). Pub. L. 107-147 substituted "1256(b)))" for "1256(b))".2001-Subsec. (a)(3)(C). Pub. L. 107-16, §542(e)(2)(A), inserted "(other than by reason of section 1022)" after "is determined". 1999- Pub. L. 106-170 designated existing provisions as subsec. (a), inserted heading, and added pars. (6) to (8) and subsec. (b).1981-Pars. (5), (6). Pub. L. 97-34 redesignated par. (6) as (5) and struck out former par. (5), which excluded from definition of "capital asset" an obligation of the United States or any of its possessions, or of a State or any political subdivision thereof, or of the District of Columbia, issued on or after March 1, 1941, on a discount basis and payable without interest at a fixed maturity date not exceeding one year from the date of issue, and is covered by section 1232(a)(4)(B) of this title.1976-Par. (5). Pub. L. 94-455, §1901(c)(9), struck out "or Territory," after "State". Par. (6). Pub. L. 94-455, §2132(a), added par. (6). 1969-Par. (3). Pub. L. 91-172 inserted reference to a letter or memorandum, added subpar. (B) dealing with a letter or memorandum, and redesignated former subpar. (B) as (C).
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2017 AMENDMENT Pub. L. 115-97, §13314(c), Dec. 22, 2017, 131 Stat. 2133, provided that: "The amendments made by this section [amending this section and section 1231 of this title] shall apply to dispositions after December 31, 2017."
EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111-312 applicable to estates of decedents dying, and transfers made after Dec. 31, 2009, except as otherwise provided, see section 301(e) of Pub. L. 111-312, set out as an Effective and Termination Dates of 2010 Amendment note under section 121 of this title.
EFFECTIVE DATE OF 2006 AMENDMENT Pub. L. 109-432, div. A, title IV, §412(b), Dec. 20, 2006, 120 Stat. 2963, provided that: "The amendment made by this section [amending this section] shall take effect as if included in section 204 of the Tax Increase Prevention and Reconciliation Act of 2005 [Pub. L. 109-222]." Amendment by Pub. L. 109-222 applicable to sales and exchanges in taxable years beginning after May 17, 2006, see section 204(c) of Pub. L. 109-222, set out as a note under section 170 of this title.
EFFECTIVE DATE OF 2001 AMENDMENT Amendment by Pub. L. 107-16 applicable to estates of decedents dying after Dec. 31, 2009, see section 542(f)(1) of Pub. L. 107-16, set out as a note under section 121 of this title.
EFFECTIVE DATE OF 1999 AMENDMENT Amendment by Pub. L. 106-170 applicable to any instrument held, acquired, or entered into, any transaction entered into, and supplies held or acquired on or after Dec. 17, 1999, see section 532(d) of Pub. L. 106-170, set out as a note under section 170 of this title.
EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97-34 applicable to property acquired and positions established by the taxpayer after June 23, 1981, in taxable years ending after such date, and applicable when so elected with respect to property held on June 23, 1981, see section 508 of Pub. L. 97-34, set out as an Effective Date note under section 1092 of this title.
EFFECTIVE DATE OF 1976 AMENDMENT Pub. L. 94-455, title XXI, §2132(b), Oct. 4, 1976, 90 Stat. 1925, provided that: "The amendment made by subsection (a) [amending this section] shall apply to sales, exchanges, and contributions made after the date of enactment of this Act [Oct. 4, 1976]."
EFFECTIVE DATE OF 1969 AMENDMENT Pub. L. 91-172, title V, §514(c), Dec. 30, 1969, 83 Stat. 643, provided that: "The amendments made by this section [amending this section and sections 341 and 1231 of this title] shall apply to sales and other dispositions occurring after July 25, 1969."
- Secretary
- The term "Secretary" means the Secretary of the Treasury or his delegate.
- State
- The term "State" shall be construed to include the District of Columbia, where such construction is necessary to carry out provisions of this title.
- corporation
- The term "corporation" includes associations, joint-stock companies, and insurance companies.
- person
- The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
- stock
- The term "stock" includes shares in an association, joint-stock company, or insurance company.
- taxable year
- The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed under subtitle A. "Taxable year" means, in the case of a return made for a fractional part of a year under the provisions of subtitle A or under regulations prescribed by the Secretary, the period for which such return is made.
- taxpayer
- The term "taxpayer" means any person subject to any internal revenue tax.
- trade or business
- The term "trade or business" includes the performance of the functions of a public office.
- transaction
- The term "transaction" includes a series of transactions.