- 23 -
business day of the taxable year and any gain or loss on those
contracts shall be treated as a 40-percent short-term capital
gain or loss and a 60-percent long-term capital gain or loss.
Section 1256 applies to all positions acquired after June 23,
1981. ERTA sec. 508(a), 95 Stat. 333. Unless an election was
made under sections 508(c) or 509 of ERTA (collectively the
transitional rule elections), the law in effect prior to the
enactment of section 1256 applied to all regulated futures
contracts acquired on or before June 23, 1981 (pre-June 24
contracts). Secs. 5c.1256-1 and 5c.1256-2, Temporary Income Tax
Regs., 47 Fed. Reg. 38689 (Sept. 2, 1982).10 The deadline for an
election under section 509 of ERTA was established by Congress in
ERTA section 509(b), 95 Stat. 334. Congress deferred to the
Secretary of the Treasury (the Secretary) to set the time limit
on the exercise of an elective choice under ERTA section 508(c),
95 Stat. 333, and the Secretary established the time limit in
section 5c.1256-1(b), Temporary Income Tax Regs., 47 Fed. Reg.
38689 (Sept. 2, 1982). Both transitional rule elections were
required to be made by the due date (including extensions) of the
taxpayer's Federal income tax return for the taxable year that
included June 23, 1981.
10 Secs. 5c.1256-1 and 5c.1256-2, Temporary Income Tax
Regs., 47 Fed. Reg. 38688, 68689 (Sept. 2, 1982), remain in
effect until superseded by final regulations on this subject.
T.D. 7826, 1982-2 C.B. 196. No final regulations have been
issued.
Page: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 NextLast modified: May 25, 2011