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taxpayer and which is not held for
sale, and (ii) any obligation to
acquire a security described in
clause (i) if such obligation is
entered into in the ordinary course
of such trade or business and is
not held for sale, and
(C) any security which is a
hedge with respect to--
(i) a security to
which subsection (a) does
not apply, or
(ii) a position,
right to income, or a
liability which is not a
security in the hands of
the taxpayer.
To the extent provided in regulations,
subparagraph (C) shall not apply to any
security held by a person in its capacity as
a dealer in securities.
(2) Identification required.--A security
shall not be treated as described in
subparagraph (A), (B), or (C) of paragraph
(1), as the case may be, unless such security
is clearly identified in the dealer’s records
as being described in such subparagraph
before the close of the day on which it was
acquired, originated, or entered into (or
such other time as the Secretary may by
regulations prescribe).
(3) Securities subsequently not
exempt.--If a security ceases to be described
in paragraph (1) at any time after it was
identified as such under paragraph (2),
subsection (a) shall apply to any changes in
value of the security occurring after the
cessation.
(4) Special rule for property held for
investment.--To the extent provided in
regulations, subparagraph (A) of paragraph
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