Internal Revenue Service, Treasury § 1.1092(C)–1
Internal Revenue Service, Treasury § 1.1092(c)–1
(i) Contain the name, address, and (4) Which is not part of a larger taxpayer identification number of the straddle. taxpayer; (f) Non-section 1256 position. The term (ii) Show that the volume or nature non-section 1256 position means a posi- of the taxpayer’s activities has tion that is not a section 1256 contract. changed substantially since the elec- (g) Offsetting position. The term offset- tion was made, and that the taxpayer’s ting position means an offsetting posi- activities no longer warrant the use of tion as defined in section 1092(c)(2). such mixed straddle account; and (h) Position. The term position means (iii) Any other relevant information. a position as defined in section If a taxpayer’s election for a taxable 1092(d)(2). year is revoked, the taxpayer may not (i) [Reserved] make a new election for the same class (j) Related person or flowthrough enti- of activities under paragraph (f)(1) of ty. The term related person or this section during the same taxable flowthrough entity means a related per- year. son or flowthrough entity as defined in (g) Effective date. The provisions of sections 1092(d)(4) (B) and (C) respec- this section apply to positions held on tively. or after January 1, 1984. (k) Section 1256 contract. The term sec- tion 1256 contract means a section 1256 (Secs. 1092(b)(1), 1092(b)(2) and 7805 of the In- contract as defined in section 1256(b). ternal Revenue Code of 1954 (68A Stat. 917, 98 (l) [Reserved] Stat. 627; 26 U.S.C. 1092(b)(1), 1092(b)(2), 7805)) (m) Straddle. The term straddle means [T.D. 8008, 50 FR 3329, Jan. 24, 1985; 50 FR a straddle as defined in section 12243, Mar. 28, 1985, as amended by T.D. 8058, 1092(c)(1). 50 FR 42013, Oct. 17, 1985] (n) Successor position. The term suc- cessor position means a position (‘‘P’’) § 1.1092(b)–5T Definitions (temporary). that is or was at any time offsetting to The following definitions apply for a second position if— purposes of §§ 1.1092(b)–1T through (1) The second position was offsetting 1.1092(b)–4T. to any loss position disposed of; and (a) Disposing, disposes, or disposed. The (2) P is entered into during a period term disposing, disposes, or disposed in- commencing 30 days prior to, and end- cludes the sale, exchange, cancellation, ing 30 days after, the disposition of the lapse, expiration, or other termination loss position referred to in paragraph of a right or obligation with respect to (n)(1) of this section. personal property (as defined in section (o) Unrecognized gain. The term un- 1092(d)(1)). recognized gain means unrecognized (b) Hedging transaction. The term gain as defined in section 1092(a)(3)(A). hedging transaction means a hedging (p) Substantially identical. The term transaction as defined in section substantially identical has the same 1256(e). meaning as substantially identical in (c) Identified straddle. The term identi- section 1091(a). fied straddle means an identified strad- (q) Securities. The term security means dle as defined in section 1092(a)(2)(B). a security as defined in section 1236(c). (d) Loss. The term loss means a loss (Secs. 1092(b) and 7805 of the Internal Rev- otherwise allowable under section enue Code of 1954 (68A Stat. 917, 95 Stat. 324, 165(a) (without regard to the limitation 26 U.S.C. 1092(b), 7805) and sec. 102(h) of the contained in section 165(f)) and in- Tax Reform Act of 1984 (98 Stat. 625)) cludes a write-down in inventory. [T.D. 8007, 50 FR 3321, Jan. 24, 1985, as amend- (e) Mixed straddle. The term mixed ed by T.D. 8070, 51 FR 1788, Jan. 15, 1986] straddle means a straddle— (1) All of the positions of which are § 1.1092(c)–1 Equity options with flexi- held as capital assets; ble terms. (2) At least one (but not all) of the (a) In general. Section 1092(c)(4) pro- positions of which is a section 1256 con- vides an exception to the general rule tract; that a straddle exists if a taxpayer (3) For which an election under sec- holds stock and writes a call option on tion 1256(d) has not been made; and that stock. Under section 1092(c)(4), the
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ownership of stock and the issuance of (D) Any changes to the SEC releases a call option meeting certain require- described in paragraphs (d)(1)(i)(A) ments result in a qualified covered through (C) of this section that are ap- call, which is exempted from the gen- proved by the Securities and Exchange eral straddle rules of section 1092. This Commission; or section addresses the consequences of (ii) That is traded on any national se- the availability of equity options with curities exchange which is registered flexible terms under the qualified cov- with the Securities and Exchange Com- ered call rules. mission (other than those described in (b) No effect on lowest qualified bench the SEC Releases set forth in para- mark for standardized options. The avail- graph (d)(1)(i) of this section) or other ability of strike prices for equity op- market which the Secretary deter- tions with flexible terms does not af- mines has rules adequate to carry out fect the determination of the lowest the purposes of section 1092 and is— qualified bench mark, as defined in sec- (A) Substantially identical to the eq- tion 1092(c)(4)(D), for an option that is uity options described in paragraph not an equity option with flexible (d)(1)(i) of this section; and terms. (c) [Reserved]. (B) Approved by the Securities and (d) Definitions. For purposes of this Exchange Commission in a Securities section Exchange Act Release. (1) Equity option with flexible terms (2) Securities Exchange Act Release means an equity option— means a release issued by the Securi- (i) That is described in any of the fol- ties and Exchange Commission. To de- lowing Securities Exchange Act Re- termine identifying information for re- leases— leases referenced in paragraph (d)(1) of (A) Self-Regulatory Organizations; this section, including release titles, Order Approving Proposed Rule identification numbers, and issue Changes and Notice of Filing and Order dates, contact the Office of the Sec- Granting Accelerated Approval of retary, Securities and Exchange Com- Amendments by the Chicago Board Op- mission, 450 5th Street, NW., Wash- tions Exchange, Inc. and the Pacific ington, DC 20549. To obtain a copy of a Stock Exchange, Inc., Relating to the Securities Exchange Act Release, sub- Listing of Flexible Equity Options on mit a written request, including the Specified Equity Securities, Securities specific release identification number, Exchange Act Release No. 34–36841 title, and issue date, to Securities and (Feb. 21, 1996); or Exchange Commission, Attention Pub- (B) Self-Regulatory Organizations; lic Reference, 450 5th Street, NW., Order Approving Proposed Rule Washington, DC 20549. Changes and Notice of Filing and Order (e) Effective date. These regulations Granting Accelerated Approval of apply to equity options with flexible Amendment Nos. 2 and 3 to the Pro- terms entered into on or after January posed Rule Change by the American 25, 2000. Stock Exchange, Inc., Relating to the Listing of Flexible Equity Options on [T.D. 8866, 65 FR 3813, Jan. 25, 2000] Specified Equity Securities, Securities § 1.1092(d)–1 Definitions and special Exchange Act Release No. 34–37336 rules. (June 27, 1996); or (C) Self-Regulatory Organizations; (a) Actively traded. Actively traded Order Approving Proposed Rule Change personal property includes any per- and Notice of Filing and Order Grant- sonal property for which there is an es- ing Accelerated Approval of Amend- tablished financial market. ment Nos. 2, 4 and 5 to the Proposed (b) Established financial market—(1) In Rule Change by the Philadelphia Stock general. For purposes of this section, an Exchange, Inc., Relating to the Listing established financial market includes— of Flexible Exchange Traded Equity (i) A national securities exchange and Index Options, Securities Exchange that is registered under section 6 of the Act Release No. 34–39549 (Jan. 23, 1998); Securities Exchange Act of 1934 (15 or U.S.C. 78f);
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