475(d) (3)(A)(i) provides that ordinary income or loss
treatment is accorded for any sale or disposition of securities by securities traders; taxpayers who qualify for the election can carry back the losses to offset income from prior years.
For many years, transactions involving the acquisition of property by businesses to hedge against price changes of other assets and liabilities were characterized upon disposition as giving rise to ordinary income or loss.
The preamble documents other instances where congressional action was premised on its understanding that business hedging transactions are outside the scope of the definition of capital assets and, thus, give rise to ordinary income or loss.
A] hedging transaction means an identified transaction which the taxpayer executes in the normal course of his or her trade or business primarily to reduce certain risks and which results in only ordinary income or loss.
Ordinary property is any property that would only produce ordinary income or loss
(rather than capital gain or loss); see Regs.
The partnership reports to each partner his distributive share of partnership ordinary income or loss
and any other "item, which if separately taken into account by any partner would result in an income tax liability for that partner different from that which would result if that partner did not take the item into account separately.
1221-2(e) for a transaction to fall within such definition; such identification is relevant only to the character of the transaction and whether the taxpayer is entitled to receive ordinary income or loss
Whether hedging transactions qualify for ordinary income or loss treatment depends on whether the hedging instrument is a capital asset.
5) had been interpreted as allowing ordinary income or loss treatment for any asset acquired and held for business, rather than investment, purposes.
In general, the regulations prescribe that ordinary income or loss
would result from the hedging transactions and also establish timing rules for recognition of any gain/loss.
1092(c)(4), a taxpayer holds a qualified covered call option if the following five factors are met at the time the call option is written: (1) the option is traded on a national securities exchange; (2) the option will not expire for more than 30 days; (3) the option is not deep-in-the-money; (4) the option is not granted by an options dealer; and (5) any gain or loss with respect to the option is not ordinary income or loss
Congress intended that profits and losses arising from the everyday operation of business be considered as ordinary income or loss
rather than capital gain or loss.