26-U.S.C.-1236
§1236 – Dealers In Securities
Pathway
Title 26 > Subtitle A > Chapter 1 > Subchapter P > Part IV > Section 1236
Details
- Reference: Section 1236
- Legend: §1236 – Dealers In Securities
- USCode Year: 2013
Provision Content
(a) Capital gains
Gain by a dealer in securities from the sale or exchange of any security shall in no event be considered as gain from the sale or exchange of a capital asset unless—
(1) the security was, before the close of the day on which it was acquired (or such earlier time as the Secretary may prescribe by regulations), clearly identified in the dealers records as a security held for investment; and
(2) the security was not, at any time after the close of such day (or such earlier time), held by such dealer primarily for sale to customers in the ordinary course of his trade or business.
(b) Ordinary losses
Loss by a dealer in securities from the sale or exchange of any security shall, except as otherwise provided in section 582(c), (relating to bond, etc., losses of banks), in no event be considered as ordinary loss if at any time after November 19, 1951, the security was clearly identified in the dealers records as a security held for investment.
(c) Definition of security
For purposes of this section, the term security means any share of stock in any corporation, certificate of stock or interest in any corporation, note, bond, debenture, or evidence of indebtedness, or any evidence of an interest in or right to subscribe to or purchase any of the foregoing.
(d) Special rule for floor specialists
(1) In general
In the case of a floor specialist (but only with respect to acquisitions, in connection with his duties on an exchange, of stock in which the specialist is registered with the exchange), subsection (a) shall be applied—
(A) by inserting the 7th business day following before the day the first place it appears in paragraph (1) and by inserting 7th business before day in paragraph (2), and
(B) by striking the parenthetical phrase in paragraph (1).
(2) Floor specialist
The term floor specialist means a person who is—
(A) a member of a national securities exchange,
(B) is registered as a specialist with the exchange, and
(C) meets the requirements for specialists established by the Securities and Exchange Commission.
(e) Special rule for options
For purposes of subsection (a), any security acquired by a dealer pursuant to an option held by such dealer may be treated as held for investment only if the dealer, before the close of the day on which the option was acquired, clearly identified the option on his records as held for investment. For purposes of the preceding sentence, the term option includes the right to subscribe to or purchase any security.
(Aug. 16, 1954, ch. 736, 68A Stat. 330; Pub. L. 94–455, title XIX, §1901(b)(3)(E), Oct. 4, 1976, 90 Stat. 1793; Pub. L. 97–34, title V, §506, Aug. 13, 1981, 95 Stat. 332; Pub. L. 97–448, title I, §105(d)(1), Jan. 12, 1983, 96 Stat. 2387; Pub. L. 98–369, div. A, title I, §107(b), July 18, 1984, 98 Stat. 630.)
Amendments
1984—Subsec. (a)(1). Pub. L. 98–369, §107(b)(1), substituted the security was, before the close of the day on which it was acquired (or such earlier time as the Secretary may prescribe by regulations), clearly identified in the dealers records as a security held for investment; and for the security was, before the close of the day on which it was acquired (before the close of the following day in the case of an acquisition before January 1, 1982), clearly identified in the dealers records as a security held for investment or if acquired before October 20, 1951, was so identified before November 20, 1951; and.
Subsec. (a)(2). Pub. L. 98–369, §107(b)(2), inserted (or such earlier time) after such day.
1983—Subsec. (e). Pub. L. 97–448 added subsec. (e).
1981—Subsec. (a). Pub. L. 97–34, §506(a), substituted before the close of the day on which it was acquired (before the close of the following day in the case of an acquisition before January 1, 1982) for before the expiration of the 30th day after the date of its acquisition in par. (1) and close of such day for expiration of such 30th day in par. (2).
Subsec. (d). Pub. L. 97–34, §506(b), added subsec. (d).
1976—Subsec. (b). Pub. L. 94–455 substituted ordinary loss for loss from the sale or exchange of property which is not a capital asset.
Effective Date of 1984 Amendment
Amendment by Pub. L. 98–369 applicable to positions entered into after July 18, 1984, in taxable years ending after that date, see section 107(e) of Pub. L. 98–369, set out as a note under section 1092 of this title.
Effective Date of 1983 Amendment
Pub. L. 97–448, title I, §105(d)(2), Jan. 12, 1983, 96 Stat. 2387, provided that: The amendment made by paragraph (1) [amending this section] shall apply to securities acquired after September 22, 1982, in taxable years ending after such date.
Effective Date of 1981 Amendment
Amendment by Pub. L. 97–34 applicable to property acquired by the taxpayer after Aug. 13, 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 an Effective Date note under section 1092 of this title.
Effective Date of 1976 Amendment
Amendment by Pub. L. 94–455 applicable with respect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.
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