
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document affected by Public Law 106-554 Section 1(a)(7)[401(b)]]
[CITE: 26USC1234A]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
                 Subchapter P--Capital Gains and Losses
 
     PART IV--SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES
 
Sec. 1234A. Gains or losses from certain terminations

    Gain or loss attributable to the cancellation, lapse, expiration, or 
other termination of--
        (1) a right or obligation (other than a securities futures 
    contract, as defined in section 1234B) with respect to property 
    which is (or on acquisition would be) a capital asset in the hands 
    of the taxpayer,
        (2) a section 1256 contract (as defined in section 1256) not 
    described in paragraph (1) which is a capital asset in the hands of 
    the taxpayer, or
        (3) a securities futures contract (as so defined) which is a 
    capital asset in the hands of the taxpayer,

shall be treated as gain or loss from the sale of a capital asset. The 
preceding sentence shall not apply to the retirement of any debt 
instrument (whether or not through a trust or other participation 
arrangement).

(Added Pub. L. 97-34, title V, Sec. 507(a), Aug. 13, 1981, 95 Stat. 333; 
amended Pub. L. 97-448, title I, Sec. 105(e), Jan. 12, 1983, 96 Stat. 
2387; Pub. L. 98-369, div. A, title I, Sec. 102(e)(4), (9), July 18, 
1984, 98 Stat. 624, 625; Pub. L. 105-34, title X, Sec. 1003(a)(1), Aug. 
5, 1997, 111 Stat. 909; Pub. L. 106-554, Sec. 1(a)(7) [title IV, 
Sec. 401(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A-648.)


                               Amendments

    2000--Par. (1). Pub. L. 106-554, Sec. 1(a)(7) [title IV, 
Sec. 401(b)(1)], inserted ``(other than a securities futures contract, 
as defined in section 1234B)'' after ``right or obligation''.
    Par. (3). Pub. L. 106-554, Sec. 1(a)(7) [title IV, Sec. 401(b)(2)-
(4)], added par. (3).
    1997--Par. (1). Pub. L. 105-34 substituted ``property'' for 
``personal property (as defined in section 1092(d)(1))''.
    1984--Pub. L. 98-369, Sec. 102(e)(9), inserted at end ``The 
preceding sentence shall not apply to the retirement of any debt 
instrument (whether or not through a trust or other participation 
arrangement).''
    Par. (2). Pub. L. 98-369, Sec. 102(e)(4), substituted ``a section 
1256 contract'' for ``a regulated futures contract''.
    1983--Pub. L. 97-448 inserted reference to a regulated futures 
contract (as defined in section 1256) not described in paragraph (1) 
which is a capital asset in the hands of the taxpayer.


                    Effective Date of 1997 Amendment

    Section 1003(a)(2) of Pub. L. 105-34 provided that: ``The amendment 
made by paragraph (1) [amending this section] shall apply to 
terminations more than 30 days after the date of the enactment of this 
Act [Aug. 5, 1997].''


                    Effective Date of 1984 Amendment

    Amendment by section 102(e)(4) of Pub. L. 98-369 applicable to 
positions established after July 18, 1984, in taxable years ending after 
that date, except as otherwise provided, and amendment by section 
102(e)(9) of Pub. L. 98-369, applicable as if included in the amendment 
made by section 507(a) of Pub. L. 97-34, as amended by section 105(e) of 
Pub. L. 97-448, see section 102(f), (g) of Pub. L. 98-369, set out as a 
note under section 1256 of this title.


                    Effective Date of 1983 Amendment

    Amendment by Pub. L. 97-448 effective, except as otherwise provided, 
as if it had been included in the provision of the Economic Recovery Tax 
Act of 1981, Pub. L. 97-34, to which such amendment relates, see section 
109 of Pub. L. 97-448, set out as a note under section 1 of this title.


                             Effective Date

    Section applicable to property acquired and positions established by 
the taxpayer after June 23, 1981, in taxable years ending after such 
date, and applicable when so elected with respect to property held on 
June 23, 1981, see section 508 of Pub. L. 97-34, set out as a note under 
section 1092 of this title.
