republic-os/legal/us/code/title-26/chapter-1/section-1234a.md

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LegalText	26 U.S.C. § 1234A	Gains or losses from certain terminations	us	united_states_code	code_section	26	INTERNAL REVENUE CODE	1	NORMAL TAXES AND SURTAXES	1234A	26 U.S.C. § 1234A	current	119-100	2026-06-26	official	https://uscode.house.gov/download/releasepoints/us/pl/119/100/xml_usc26@119-100.zip	/us/usc/t26/s1234A	data/legal/raw/us/code/title-26/usc26.xml	adfda345e7718b7dfc43c90c2060bf306d3d1f09843997abe6f6d06d303b774d	a261f094809116f42a96648a3d5eee80fa010379d67412551c21dd5c900b27f4	a230278c2c712f306e7480f8e23d7524d35ff33a46628ddc3db5753e51da9b8f	2026-07-04	official	legal us-code

26 U.S.C. § 1234A - Gains or losses from certain terminations

Text

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).

(Added Pub. L. 97–34, title V, § 507(a), Aug. 13, 1981, 95 Stat. 333; amended Pub. L. 97–448, title I, § 105(e), Jan. 12, 1983, 96 Stat. 2387; Pub. L. 98–369, div. A, title I, § 102(e)(4), (9), July 18, 1984, 98 Stat. 624, 625; Pub. L. 105–34, title X, § 1003(a)(1), Aug. 5, 1997, 111 Stat. 909; Pub. L. 106–554, § 1(a)(7) [title IV, § 401(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A–648; Pub. L. 107–147, title IV, § 412(d)(1)(A), Mar. 9, 2002, 116 Stat. 53.)

Notes

Editorial Notes

Amendments2002—Pars. (1) to (3). Pub. L. 107–147 inserted “or” at end of par. (1), struck out “or” at end of par. (2), and struck out par. (3) which read as follows: “a securities futures contract (as so defined) which is a capital asset in the hands of the taxpayer,”. 2000—Par. (1). Pub. L. 106–554, § 1(a)(7) [title IV, § 401(b)(1)], inserted “(other than a securities futures contract, as defined in section 1234B)” after “right or obligation”. Par. (3). Pub. L. 106–554, § 1(a)(7) [title IV, § 401(b)(2)–(4)], added par. (3). 1997—Par. (1). Pub. L. 105–34 substituted “property” for “personal property (as defined in section 1092(d)(1))”. 1984—Pub. L. 98–369, § 102(e)(9), inserted at end “The preceding sentence shall not apply to the retirement of any debt instrument (whether or not through a trust or other participation arrangement).” Par. (2). Pub. L. 98–369, § 102(e)(4), substituted “a section 1256 contract” for “a regulated futures contract”. 1983—Pub. L. 97–448 inserted reference to a regulated futures contract (as defined in section 1256) not described in paragraph (1) which is a capital asset in the hands of the taxpayer.

Statutory Notes and Related Subsidiaries

Effective Date of 2002 AmendmentAmendment by Pub. L. 107–147 effective as if included in the provisions of the Community Renewal Tax Relief Act of 2000 [H.R. 5662, as enacted by Pub. L. 106–554], to which such amendment relates, see section 412(e) of Pub. L. 107–147, set out as a note under section 151 of this title.

Effective Date of 1997 AmendmentPub. L. 105–34, title X, § 1003(a)(2), Aug. 5, 1997, 111 Stat. 910, provided that: “The amendment made by paragraph (1) [amending this section] shall apply to terminations more than 30 days after the date of the enactment of this Act [Aug. 5, 1997].”

Effective Date of 1984 AmendmentAmendment by section 102(e)(4) of Pub. L. 98–369 applicable to positions established after July 18, 1984, in taxable years ending after that date, except as otherwise provided, and amendment by section 102(e)(9) of Pub. L. 98–369, applicable as if included in the amendment made by section 507(a) of Pub. L. 97–34, as amended by section 105(e) of Pub. L. 97–448, see section 102(f), (g) of Pub. L. 98–369, set out as a note under section 1256 of this title.

Effective Date of 1983 AmendmentAmendment by Pub. L. 97–448 effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981, Pub. L. 97–34, to which such amendment relates, see section 109 of Pub. L. 97–448, set out as a note under section 1 of this title.

Effective DateSection applicable to property acquired and positions established by the taxpayer after June 23, 1981, in taxable years ending after such date, and applicable when so elected with respect to property held on June 23, 1981, see section 508 of Pub. L. 97–34, set out as a note under section 1092 of this title.