PUBLIC LAW 105-34—AUG. 5, 1997 111 STAT. 905 "(I) which also would otherwise be treated as a constructive sale of such position, "(11) which is closed before the 30th day after the close of the taxable year in which the transaction referred to in clause (i) occurs, and "(III) which meets the requirements of clauses (ii) and (iii) of subparagraph (A), the transaction referred to in clause (ii) shall be disregarded for purposes of determining whether the requirements of subparagraph (A)(iii) are met with respect to the transaction described in clause (i). "(4) RELATED PERSON.—A person is related to another person with respect to a transaction if— "(A) the relationship is described in section 267(b) or 707(b), and "(B) such transaction is entered into with a view toward avoiding the purposes of this section. "(d) OTHER DEFINITIONS. —For purposes of this section— "(1) FORWARD CONTRACT.—The term 'forward contract' means a contract to deliver a substsmtially fixed amount of property for a substantially fixed price. "(2) OFFSETTING NOTIONAL PRINCIPAL CONTRACT.— The term 'offsetting notional principal contract' mesins, with respect to any property, an agreement which includes— "(A) a requirement to pay (or provide credit for) all or substantially all of the investment yield (including appreciation) on such property for a specified period, and "(B) a right to be reimbursed for (or receive credit for) all or substantially all of any decline in the value of such property. " (e) SPECIAL RULES. — " (1) TREATMENT OF SUBSEQUENT SALE OF POSITION WHICH WAS DEEMED SOLD. — If— "(A) there is a constructive sale of any appreciated financial position, "(B) such position is subsequently disposed of, and "(C) at the time of such disposition, the transaction resulting in the constructive sale of such position is open with respect to the taxpayer or any related person, solely for purposes of determining whether the taxpayer has entered into a constructive sale of any other appreciated financial position held by the taxpayer, the taxpayer shall be treated as entering into such transaction immediately after such disposition. For purposes of the preceding sentence, an assignment or other termination shall be treated as a disposition. " (2) CERTAIN TRUST INSTRUMENTS TREATED AS STOCK. — 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 sulbsection (b)(2)(A). "(3) MULTIPLE POSITIONS IN PROPERTY. — 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. 39-194O-97-30:QL3Part1
�
