PUBLIC LAW 106-554—APPENDIX G 114 STAT. 2763A-649 (1) by inserting "(other than a securities futures contract, as defined in section 1234B)" after "right or obligation" in paragraph (1), (2) by striking "or" at the end of paragraph (1), (3) by adding "or" at the end of paragraph (2), and (4) by inserting sifter paragraph (2) the following new paragraph: "(3) a securities futures contract (as so defined) which is a capital asset in the hands of the taxpayer,". (c) NONRECOGNITION UNDER SECTION 1032. —The second sentence of section 1032(a) is amended by inserting ", or with respect to a securities futures contract (as defined in section 1234B)," after "an option". (d) TREATMENT UNDER WASH SALES RULES.— Section 1091 is amended by adding at the end the following new subsection: "(f) CASH SETTLEMENT. — This section shall not fail to apply to a contract or option to acquire or sell stock or securities solely by reason of the fact that the contract or option settles in (or could be settled in) cash or property other than such stock or securities.". (e) TREATMENT UNDER STRADDLE RULES. —Clause (i) of section 1092(d)(3)(B) is amended by striking "or" at the end of subclause (I), by redesignating subclause (II) as subclause (III), and by inserting after subclause (I) the following new subclause: "(II) a securities futures contract (as defined in section 1234B) with respect to such stock or substantially identical stock or securities, or". (f) TREATMENT UNDER SHORT SALES RULES. —Paragraph (2) of section 1233(e) is amended by striking "and" at the end of subparagraph (B), by striking the period at the end of subparagraph (C) and inserting "; and", and by adding at the end the following: "(D) a securities futures contract (as defined in section 1234B) to acquire substeintially identical property shall be treated as substantially identical property.". (g) TREATMENT UNDER SECTION 1256.— (1)(A) Subsection (b) of section 1256 is amended by striking "and" at the end of paragraph (3), by striking the period at the end of paragraph (4) and inserting ", and", and by adding at the end the following: "(5) any dealer securities futures contract. The term 'section 1256 contract' shall not include any securities futures contract or option on such a contract unless such contract Or option is a dealer securities futures contract.". (B) Subsection (g) of section 1256 is amended by adding at the end the following new paragraph: "(9) DEALER SECURITIES FUTURES CONTRACT. — "(A) IN GENERAL.—The term 'dealer securities futures contract' means, with respect to any dealer, any securities futures contract, and any option on such a contract, which— "(i) is entered into by such dealer (or, in the case of an option, is purchased or grsmted by such dealer) in the normal course of his activity of dealing in such contracts or options, as the case may be, and "(ii) is traded on a qualified board or exchange. "(B) DEALER. —For purposes of subparagraph (A), a person shall be treated as a dealer in securities futures
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