Recharacterization of gain from certain financial transactions

In the case of any gain— For purposes of subsection (a), the term “applicable imputed income amount” means, with respect to any disposition or other termination referred to in subsection (a), an amount equal to— For purposes of this section, the term “conversion transaction” means any transaction— which is— For purposes of this section— The term “applicable straddle” means any straddle (within the meaning of section 1092(c)). The term “applicable rate” means— If any position with a built-in loss becomes part of a conversion transaction— For purposes of subparagraph (A), the term “built-in loss” means the loss (if any) which would have been realized if the position had been disposed of or otherwise terminated at its fair market value as of the time such position became part of the conversion transaction. In determining the taxpayer’s net investment in any conversion transaction, there shall be included the fair market value of any position which becomes part of such transaction (determined as of the time such position became part of such transaction). Subsection (a) shall not apply to transactions— For purposes of this paragraph— The term “options dealer” has the meaning given such term by section 1256(g)(8). The term “commodities trader” means any person who is a member (or, except as otherwise provided in regulations, is entitled to trade as a member) of a domestic board of trade which is designated as a contract market by the Commodity Futures Trading Commission. In the case of any gain from a transaction recognized by an entity which is allocable to a limited partner or limited entrepreneur (within the meaning of section 461(k)(4)), subparagraph (A) shall not apply if—