In the case of any gain-
such gain (to the extent such gain does not exceed the applicable imputed income amount) shall be treated as ordinary income.
For purposes of subsection (a), the term "applicable imputed income amount" means, with respect to any disposition or other termination referred to in subsection (a), an amount equal to-
The Secretary shall by regulations provide for such reductions in the applicable imputed income amount as may be appropriate by reason of amounts capitalized under section 263(g), ordinary income received, or otherwise.
For purposes of this section, the term "conversion transaction" means any transaction-
For purposes of this section-
The term "applicable straddle" means any straddle (within the meaning of section 1092(c)).
The term "applicable rate" means-
If any position with a built-in loss becomes part of a conversion transaction-
For purposes of subparagraph (A), the term "built-in loss" means the loss (if any) which would have been realized if the position had been disposed of or otherwise terminated at its fair market value as of the time such position became part of the conversion transaction.
In determining the taxpayer's net investment in any conversion transaction, there shall be included the fair market value of any position which becomes part of such transaction (determined as of the time such position became part of such transaction).
Subsection (a) shall not apply to transactions-
For purposes of this paragraph-
The term "options dealer" has the meaning given such term by section 1256(g)(8).
The term "commodities trader" means any person who is a member (or, except as otherwise provided in regulations, is entitled to trade as a member) of a domestic board of trade which is designated as a contract market by the Commodity Futures Trading Commission.
In the case of any gain from a transaction recognized by an entity which is allocable to a limited partner or limited entrepreneur (within the meaning of section 461(k)(4)), subparagraph (A) shall not apply if-
26 U.S.C. § 1258
EDITORIAL NOTES
AMENDMENTS2018-Subsec. (d)(5)(C). Pub. L. 115-141 substituted "section 461(k)(4)" for "section 464(e)(2)" in introductory provisions.2004-Subsec. (d)(1). Pub. L. 108-357 struck out "; except that the term 'personal property' shall include stock" before period at end.
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2004 AMENDMENT Amendment by Pub. L. 108-357 applicable to positions established on or after Oct. 22, 2004, see section 888(e) of Pub. L. 108-357, set out as a note under section 246 of this title.
EFFECTIVE DATE Pub. L. 103-66, §13206(a)(3), Aug. 10, 1993, 107 Stat. 465, as amended by Pub. L. 104-188, §1703(n) (11), Aug. 20, 1996, 110 Stat. 1877, provided that: "The amendments made by this subsection [enacting this section] shall apply to conversion transactions entered into after April 30, 1993."
- Secretary
- The term "Secretary" means the Secretary of the Treasury or his delegate.
- 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.
- 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.