Estate of Leon Israel, Jr., Deceased, Barry W. Gray, Executor, and Audrey H. Israel - Page 20

            what was bargained for (participation in this interest-sensitive                          
            risk transaction for a period of time) and when the investor                              
            closed the leg or the position (by whichever of the various                               
            "alternative liquidation techniques" that are made available to                           
            investors in commodities forward contracts (see Ewing v.                                  
            Commissioner, 91 T.C. 396, 418 (1988), affd. without published                            
            opinion 940 F.2d 1534 (9th Cir. 1991)), the investor effectively                          
            sold off or extinguished and exchanged that right to participate                          
            and realized the gain or loss associated therewith up to that                             
            point in time.                                                                            
                  When the investor chooses to dispose of or terminate that                           
            risk, or any part thereof, and to lock in the gain or loss that                           
            has occurred on any leg of the straddle, because of swings in                             
            interest rates on Government securities that have occurred, the                           
            investor elects a method to do so, but each method produces                               
            exactly the same economic event and consequence, only nominal                             
            differences in form, and certainly, as between the parties to the                         
            forward contracts, a sale or exchange of the respective price-                            
            differential and interest-sensitive risk positions that their                             
            contracts represented from the time they first entered into the                           
            forward contracts up until the time that the risk is terminated                           
            and the gain or loss is locked in.                                                        
                  As we stated in Hoover Co. v. Commissioner, 72 T.C. 206, 249                        
            (1979), in analyzing payments labeled as "compensating" payments                          

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