§ 1092(c)(1)

a straddle

UNDECIDED

0 of 16 settled

  1. 1

    § 1092(c)(1)

    ALL OF
    “offsetting positions” § 1092(c)(2)(A)

    Step 2 offsetting positions UNDECIDED

    Research 1
    “personal property” § 1092(d)(1)

    Step 5 personal property UNDECIDED

    Research 1

    Cases: Rivera v. Commissioner, 89 T.C. 343 (1987)

    Research 1
  2. 2

    § 1092(c)(2)(A)

    offsetting positions

    ALL OF
    “there is a substantial diminution of the taxpayer’s risk of loss from holding any position with respect to personal property by reason of his holding 1 or more other positions with respect to personal property (whether or not of the same kind)”

    “Substantial” implies facts and circumstances. No regulation cites this provision (eCFR, Oct 19, 2026)

    UNLESS Step 3 the identified straddle rule: a position outside an identified straddle is not offsetting with respect to a position inside one UNDECIDED

    Research 1
    Research 1
  3. 3

    § 1092(c)(2)(B)

    the identified straddle rule: a position outside an identified straddle is not offsetting with respect to a position inside one

    ALL OF
    “any position which is not part of an identified straddle (within the meaning of subsection (a)(2)(B))” unless Step 4 an identified straddle UNDECIDED
    “any position which is part of an identified straddle”
    Research 1
  4. 4

    § 1092(a)(2)(B)

    an identified straddle

    ALL OF

    The term “identified straddle” means any straddle—

    “which is clearly identified on the taxpayer’s records as an identified straddle before the earlier of— the close of the day on which the straddle is acquired, or such time as the Secretary may prescribe by regulations.” § 1092(a)(2)(B)(i)

    “As the Secretary may prescribe” leaves this to Treasury. No regulation cites this provision (eCFR, Oct 19, 2026)

    “to the extent provided by regulations, the value of each position of which (in the hands of the taxpayer immediately before the creation of the straddle) is not less than the basis of such position in the hands of the taxpayer at the time the straddle is created, and” § 1092(a)(2)(B)(ii)

    “To the extent provided by regulations” leaves this to Treasury. No regulation cites this provision (eCFR, Oct 19, 2026)

    “which is not part of a larger straddle.” § 1092(a)(2)(B)(iii)
    Research 1

    A straddle shall be treated as clearly identified for purposes of clause (i) only if such identification includes an identification of the positions in the straddle which are offsetting with respect to other positions in the straddle.

    Research 1
  5. 5

    § 1092(d)(1)

    personal property

    ALL OF
    “any personal property of a type which is actively traded” needs Step 6 not stock, or stock that § 1092(d)(3)(A) includes UNDECIDED

    An established financial market is enough, Reg. § 1.1092(d)-1(a)

    Research 1

    Cases: Rivera v. Commissioner, 89 T.C. 343 (1987)

  6. 6

    § 1092(d)(3)

    not stock, or stock that § 1092(d)(3)(A) includes

    ANY OF
    NOT“In the case of stock” § 1092(d)(3)(A)
    Research 1
    “the term “personal property” includes stock” § 1092(d)(3)(A)

    Step 7 the stock is personal property UNDECIDED

    Research 1
    Research 1
  7. 7

    § 1092(d)(3)(A)

    the stock is personal property

    ANY OF

    In the case of stock, the term “personal property” includes stock only if—

    “such stock is of a type which is actively traded and at least 1 of the positions offsetting such stock is a position with respect to such stock or substantially similar or related property, or” § 1092(d)(3)(A)(i)

    “Substantially similar or related property” is defined in Reg. § 1.1092(d)-2(a).

    Step 8 clause (i): actively traded stock, offset by a position in such stock or substantially similar or related property UNDECIDED

    “such stock is of a corporation formed or availed of to take positions in personal property which offset positions taken by any shareholder.” § 1092(d)(3)(A)(ii)
    Research 1
  8. 8

    § 1092(d)(3)(A)(i)

    clause (i): actively traded stock, offset by a position in such stock or substantially similar or related property

    ANY OF
    “at least 1 of the positions offsetting such stock is a position with respect to such stock or substantially similar or related property” Opening words

    “Substantially similar or related property” is defined in Reg. § 1.1092(d)-2(a).

    “such stock is of a type which is actively traded” Opening words

    An established financial market is enough, Reg. § 1.1092(d)-1(a)

    “at least 1 of the positions offsetting such stock is a position with respect to such stock”
    “substantially similar or related property”

    “Substantially similar or related property” is defined in Reg. § 1.1092(d)-2(a).

    Reg. § 1.1092(d)-2(a), written in 1995 for former § 1092(d)(3)(B), defines the term by Reg. § 1.246-5 (other than (b)(3)) and adds “(other than stock)”, words the current clause lacks

    Step 9 substantially similar or related property under Reg. § 1.246-5: the general rule, (b)(1), the portfolio rule, (c)(1)(ii), or the anti-abuse rule, (c)(1)(vi) UNDECIDED

  9. 9

    Reg. § 1.246-5 Ambiguous

    substantially similar or related property under Reg. § 1.246-5: the general rule, (b)(1), the portfolio rule, (c)(1)(ii), or the anti-abuse rule, (c)(1)(vi)

    ANY OF

    Reg. § 1.246-5 states no single test; this gate joins the general rule, (b)(1), for nonportfolio positions, the portfolio rule, (c)(1)(ii), and the anti-abuse rule, (c)(1)(vi), across paragraphs. Conversion rights, (c)(2)(ii), guarantees, (c)(4), pass-through entities, (c)(6), and notional principal contracts, (c)(7), deem a diminished risk of loss rather than define the term; they are drawn at Reg. § 1.246-5(a) and (c)

    “In general, property is substantially similar or related to stock when” Reg. § 1.246-5(b)(1) unless Step 13 the position reflects a portfolio: stocks of 20 or more unrelated issuers UNDECIDED

    “Facts and circumstances” is the law's own test. Cited by Reg. § 1.246-5(c)(1)(ii), Reg. § 1.246-5(c)(2)(ii), Reg. § 1.246-5(d)

    The general rule, clauses (i) and (ii) of (b)(1). Not for a portfolio position: (c)(1)(ii) applies notwithstanding (b)(1); nonportfolio positions in more than one stock are separate positions in each stock, (c)(1)(v)

    Step 10 substantially similar or related property (general rule) UNDECIDED

    “a position reflecting the value of a portfolio of stocks is substantially similar or related to the stocks held by the taxpayer only if the position and the taxpayer's holdings substantially overlap as of the most recent testing date” Reg. § 1.246-5(c)(1)(ii)

    “Substantially overlap” is set out in Reg. § 1.246-5(c)(1)(iii).

    A portfolio is 20 or more unrelated issuers, (c)(1)(i); the overlapping percentage is substantially similar or related to the Subportfolio, (c)(1)(iii)(C)

    Step 12 the portfolio rule, (c)(1)(ii): a portfolio position that substantially overlaps the holdings UNDECIDED

    “a position that reflects the value of more than one stock is a position in substantially similar or related property to the appropriate portion of the taxpayer's stock holdings” Reg. § 1.246-5(c)(1)(vi)

    “Substantially similar or related property”: facts and circumstances, Reg. § 1.246-5(b)(1).

    The anti-abuse rule, clauses (A) and (B), applying notwithstanding (c)(1)(i) through (v)

    Step 16 the anti-abuse rule applies UNDECIDED

  10. 10

    Reg. § 1.246-5(b)(1)

    substantially similar or related property (general rule)

    ALL OF

    Substantially similar or related property. The term substantially similar or related property is applied according to the facts and circumstances in each case. In general, property is substantially similar or related to stock when—

    “(i) The fair market values of the stock and the property primarily reflect the performance of— (A) A single firm or enterprise; (B) The same industry or industries; or (C) The same economic factor or factors such as (but not limited to) interest rates, commodity prices, or foreign-currency exchange rates; and” Reg. § 1.246-5(b)(1)(i)

    Step 11 clause (i): the values primarily reflect the same performance UNDECIDED

    “(ii) Changes in the fair market value of the stock are reasonably expected to approximate, directly or inversely, changes in the fair market value of the property, a fraction of the fair market value of the property, or a multiple of the fair market value of the property.” Reg. § 1.246-5(b)(1)(ii)

    “Reasonably expected”: facts and circumstances, Reg. § 1.246-5(b)(4).

  11. 11

    Reg. § 1.246-5(b)(1)(i)

    clause (i): the values primarily reflect the same performance

    ANY OF
    “The fair market values of the stock and the property primarily reflect the performance of” Opening words
    “A single firm or enterprise” Reg. § 1.246-5(b)(1)(i)(A)
    “The same industry or industries” Reg. § 1.246-5(b)(1)(i)(B)
    “The same economic factor or factors such as (but not limited to) interest rates, commodity prices, or foreign-currency exchange rates” Reg. § 1.246-5(b)(1)(i)(C)
  12. 12

    Reg. § 1.246-5(c)(1)

    the portfolio rule, (c)(1)(ii): a portfolio position that substantially overlaps the holdings

    ALL OF
    “a position reflecting the value of a portfolio of stocks” Reg. § 1.246-5(c)(1)(ii)

    A portfolio is 20 or more unrelated issuers, (c)(1)(i). A position in more than one stock but not a portfolio is instead a separate position in each stock, (c)(1)(v), tested under the general rule, (b)(1)

    Step 13 the position reflects a portfolio: stocks of 20 or more unrelated issuers UNDECIDED

    “the position and the taxpayer's holdings substantially overlap as of the most recent testing date” Reg. § 1.246-5(c)(1)(ii)

    “Substantially overlap” is set out in Reg. § 1.246-5(c)(1)(iii).

    Step Two tests the whole position; Step Three the largest percentage of it, (c)(1)(iii)(C). Testing dates: (c)(1)(iv)

    Step 14 substantial overlap: Step Two, for the whole position or the largest percentage of it that overlaps (Step Three) UNDECIDED

  13. 13

    Reg. § 1.246-5(c)(1)(i)

    the position reflects a portfolio: stocks of 20 or more unrelated issuers

    ALL OF
    “any group of stocks of 20 or more unrelated issuers”
  14. 14

    Reg. § 1.246-5(c)(1)(iii)

    substantial overlap: Step Two, for the whole position or the largest percentage of it that overlaps (Step Three)

    ALL OF
    “the fair market value of the Subportfolio is equal to or greater than 70 percent of the fair market value of the stocks represented in the position” Reg. § 1.246-5(c)(1)(iii)(B)

    Step One builds the Subportfolio: for each stock in the position, the lesser of its value in the position and in the holdings, (c)(1)(iii)(A). Short of 70 percent, Step Three repeats Steps One and Two on a smaller position; the largest percentage that overlaps is substantially similar or related to its Subportfolio, (c)(1)(iii)(C)

    Step 15 substantial overlap UNDECIDED

  15. 15

    Reg. § 1.246-5(c)(1)(iii)(B)

    substantial overlap

    ALL OF
    “the fair market value of the Subportfolio is equal to or greater than 70 percent of the fair market value of the stocks represented in the position”

    Subportfolio: Step One, (c)(1)(iii)(A). Short of 70 percent, Step Three tests a smaller part of the position, (c)(1)(iii)(C)

  16. 16

    Reg. § 1.246-5(c)(1)(vi)

    the anti-abuse rule applies

    ALL OF
    “a position that reflects the value of more than one stock” Opening words
    “Changes in the value of the position or the stocks reflected in the position are reasonably expected to virtually track (directly or inversely) changes in the value of the taxpayer's stock holdings, or any portion of the taxpayer's stock holdings and other positions of the taxpayer” Reg. § 1.246-5(c)(1)(vi)(A)

    “Reasonably expected”: facts and circumstances, Reg. § 1.246-5(b)(4).

    “The position is acquired or held as part of a plan a principal purpose of which is to obtain tax savings (including by deferring tax) the value of which is significantly in excess of the expected pre-tax economic profits from the plan” Reg. § 1.246-5(c)(1)(vi)(B)