Constructive sales treatment for appreciated financial positions

If there is a constructive sale of an appreciated financial position— for purposes of applying this title for periods after the constructive sale— For purposes of this section— Except as provided in paragraph (2), the term “appreciated financial position” means any position with respect to any stock, debt instrument, or partnership interest if there would be gain were such position sold, assigned, or otherwise terminated at its fair market value. The term “appreciated financial position” shall not include— any position with respect to debt if— The term “position” means an interest, including a futures or forward contract, short sale, or option. For purposes of this section— A taxpayer shall be treated as having made a constructive sale of an appreciated financial position if the taxpayer (or a related person)— A taxpayer shall not be treated as having made a constructive sale solely because the taxpayer enters into a contract for sale of any stock, debt instrument, or partnership interest which is not a marketable security (as defined in section 453(f)) if the contract settles within 1 year after the date such contract is entered into. In applying this section, there shall be disregarded any transaction (which would otherwise cause a constructive sale) during the taxable year if— If— another transaction is entered into during the 60-day period beginning on the date the transaction referred to in clause (i) is closed— A person is related to another person with respect to a transaction if— For purposes of this section— The term “forward contract” means a contract to deliver a substantially fixed amount of property (including cash) for a substantially fixed price. The term “offsetting notional principal contract” means, with respect to any property, an agreement which includes— If— For purposes of this section, an interest in a trust which is actively traded (within the meaning of section 1092(d)(1)) shall be treated as stock unless substantially all (by value) of the property held by the trust is debt described in subsection (b)(2)(A). If a taxpayer holds multiple positions in property, the determination of whether a specific transaction is a constructive sale and, if so, which appreciated financial position is deemed sold shall be made in the same manner as actual sales. The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.