# Treas. Reg. § 1.1256(e)-1: Identification of hedging transactions.

Source: eCFR as of 2026-10-19 <https://www.ecfr.gov/current/title-26/section-1.1256(e)-1>. Interprets 26 U.S.C. § 1256.

(a) Identification and recordkeeping requirements. Under section 1256(e)(2), a taxpayer that enters into a hedging transaction must identify the transaction as a hedging transaction before the close of the day on which the taxpayer enters into the transaction. 

(b) Requirements for identification. The identification of a hedging transaction for purposes of section 1256(e)(2) must satisfy the requirements of § 1.1221-2(f)(1). Solely for purposes of section 1256(f)(1), however, an identification that does not satisfy all of the requirements of § 1.1221-2(f)(1) is nevertheless treated as an identification under section 1256(e)(2). 

(c) Consistency with § 1.1221-2. Any identification for purposes of § 1.1221-2(f)(1) is also an identification for purposes of this section. If a taxpayer satisfies the requirements of § 1.1221-2(g)(1)(ii), the transaction is treated as if it were not identified as a hedging transaction for purposes of section 1256(e)(2). 

(d) Effective date. The rules of this section apply to transactions entered into on or after March 20, 2002. 

[T.D. 8985, 67 FR 12870, Mar. 20, 2002; 67 FR 31955, May 13, 2002]