-258-
(A) identifies any security under
subsection (b)(2) as being described in
subsection (b)(1) and such security is not so
described, or
(B) fails under subsection
(c)(2)(F)(iii) to identify any position which
is described in subsection (c)(2)(F) (without
regard to clause (iii) thereof) at the time
such identification is required,
the provisions of subsection (a) shall apply to such
security or position, except that any loss under this
section prior to the disposition of the security or
position shall be recognized only to the extent of gain
previously recognized under this section (and not
previously taken into account under this paragraph)
with respect to such security or position.
(3) Character of gain or loss.--
(A) In general.--Except as provided in
subparagraph (B) or section 1236(b)--
(i) In general.--Any gain or
loss with respect to a security
under subsection (a)(2) shall be
treated as ordinary income or loss.
(ii) Special rule for
dispositions.--If--
(I) gain or loss is
recognized with respect
to a security before the
close of the taxable
year, and
(II) subsection
(a)(2) would have applied
if the security were held
as of the close of the
taxable year,
such gain or loss shall be treated as
ordinary income or loss.
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