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

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s1234A>. Cite pinpoints as 26 U.S.C. § 1234A(a)(1).

Gain or loss attributable to the cancellation, lapse, expiration, or other termination of—

## § 1234A(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

## § 1234A(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).

## Leading cases

- [Cri-Leslie, LLC v. Commissioner, 882 F.3d 1026 (11th Cir. 2018)](https://www.courtlistener.com/opinion/4468069/cri-leslie-llc-v-commissioner-of-internal-revenue/)
- [Pilgrim's Pride Corp. v. Commissioner, 779 F.3d 311 (5th Cir. 2015)](https://www.courtlistener.com/opinion/2782062/pilgrims-pride-corp-v-commissioner/)
- [Estate of McKelvey v. Commissioner, 906 F.3d 26 (2d Cir. 2018)](https://www.courtlistener.com/opinion/4538151/estate-of-andrew-j-mckelvey-v-commr-of-internal-revenue/)

## Proposed regulations (not in force)

- [Prop. Treas. Reg. § 1.1234A-1](/26/prop/1.1234A-1_04-4151.md): Notional principal contracts, bullet swaps, and forward contracts. (REG-100420-03, proposed 2004-02-26)

## Connections

Cites: § 1234B Gains or losses from securities futures contracts; § 1256 Section 1256 contracts marked to market

Cited by: none

## Amendments

- 1981-08-13: [Pub. L. 97-34](/26/act/97-34.md), 95 Stat. 333
- 1983-01-12: [Pub. L. 97-448](/26/act/97-448.md), 96 Stat. 2387
- 1984-07-18: [Pub. L. 98-369](/26/act/98-369.md), 98 Stat. 624
- 1997-08-05: [Pub. L. 105-34](/26/act/105-34.md), 111 Stat. 909
- 2000-12-21: [Pub. L. 106-554](/26/act/106-554.md), 114 Stat. 2763
- 2002-03-09: [Pub. L. 107-147](/26/act/107-147.md), 116 Stat. 53