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Sec. 1234A Gains or losses from certain terminations

  • Internal Revenue Code of 1986
  • 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

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, or

(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,

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).

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