§ 1092(c)(2)(A)

offsetting positions

UNDECIDED

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  1. 1

    § 1092(c)(2)(A)

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

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  2. 2

    § 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 3 an identified straddle UNDECIDED
    “any position which is part of an identified straddle”
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  3. 3

    § 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)
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    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.

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