Ill STAT. 904 PUBLIC LAW 105-34—AUG. 5, 1997 "(iii) such debt is not convertible (directly or indirectly) into stock of the issuer or any related person, and "(B) any position which is marked to market under any provision of this title or the regulations thereunder. "(3) POSITION. —The term 'position' means an interest, including a futures or forward contract, short sale, or option. "(c) CONSTRUCTIVE SALE. —For purposes of this section— "(1) IN GENERAL. — A taxpayer shall be treated as having made a constructive sale of an appreciated financial position if the taxpayer (or a related person)— "(A) enters into a short sale of the same or substantially identical property, "(B) enters into an offsetting notional principal contract with respect to the same or substantially identical property, "(C) enters into a futures or forward contract to deliver the same or substantially identical property, "(D) in the case of an appreciated financial position that is a short sale or a contract described in subparagraph (B) or (C) with respect to any property, acquires the same or substantially identical property, or "(E) to the extent prescribed by the Secretary in regulations, enters into 1 or more other transactions (or acquires 1 or more positions) that have substantially the same effect as a transaction described in any of the preceding subparagraphs. " (2) EXCEPTION FOR SALES OF NONPUBLICLY TRADED PROP- ERTY.— The term 'constructive sale' shall not include any 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. " (3) EXCEPTION FOR CERTAIN CLOSED TRANSACTIONS. — "(A) IN GENERAL.—In applying this section, there shall be disregarded any transaction (which would otherwise be treated as a constructive sale) during the taxable year if— "(i) such transaction is closed before the end of the 30th day after the close of such taxable year, "(ii) the tsixpayer holds the appreciated financial position throughout the 60-day period beginning on the date such transaction is closed, and "(iii) at no time during such 60-day period is the taxpayer's risk of loss with respect to such position reduced by reason of a circumstance which would be described in section 246(c)(4) if references to stock included references to such position. " (B) TREATMENT OF POSITIONS WHICH ARE REESTAB- LISHED. —I f— "(i) a transaction, which would otherwise be treated as a constructive sale of an appreciated financial position, is closed during the taxable year or during the 30 days thereafter, and "(ii) another substantially similar transaction is entered into during the 60-day period beginning on the date the trsmsaction referred to in clause (i) is closed—
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