Tax Facts

7613 / How are gains and losses from non-IRC Section 1256 positions that are part of a mixed straddle for which a straddle-by-straddle identification election has been made treated after all IRC Section 1256 positions are disposed of?

If one or more non-IRC Section 1256 positions are held after all the IRC Section 1256 contract positions in the straddle have been disposed of, any gain or loss realized on those non-IRC Section 1256 positions will be short-term capital gain or loss to the extent that such gain or loss is attributable to the period when such positions were part of the straddle.1 See Temporary Treasury Regulation Section 1.1092(b)-2T for the rules for determining the holding period with respect to such positions.

1. Temp. Treas. Reg. § 1.1092(b)-3T(b)(7).

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