Public Law 119-73 (01/23/2026)

26 U.S.C. § 1234A

Gains or losses from certain terminations

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

Pub. L. 97–34, title V, § 507(a)95 Stat. 333Pub. L. 97–448, title I, § 105(e)96 Stat. 2387Pub. L. 98–369, div. A, title I, § 102(e)(4)98 Stat. 624Pub. L. 105–34, title X, § 1003(a)(1)111 Stat. 909Pub. L. 106–554, § 1(a)(7) [title IV, § 401(b)]114 Stat. 2763Pub. L. 107–147, title IV, § 412(d)(1)(A)116 Stat. 53(Added , , ; amended , , ; , (9), , , 625; , , ; , , , 2763A–648; , , .)

Editorial Notes

Amendments

Pub. L. 107–1472002—Pars. (1) to (3). inserted “or” at end of par. (1), struck out “or” at end of par. (2), and struck out par. (3) which read as follows: “a securities futures contract (as so defined) which is a capital asset in the hands of the taxpayer,”.

Pub. L. 106–554, § 1(a)(7) [title IV, § 401(b)(1)]2000—Par. (1). , inserted “(other than a securities futures contract, as defined in section 1234B)” after “right or obligation”.

Pub. L. 106–554, § 1(a)(7) [title IV, § 401(b)(2)–(4)]Par. (3). , added par. (3).

Pub. L. 105–341997—Par. (1). substituted “property” for “personal property (as defined in section 1092(d)(1))”.

Pub. L. 98–369, § 102(e)(9)1984—, inserted at end “The preceding sentence shall not apply to the retirement of any debt instrument (whether or not through a trust or other participation arrangement).”

Pub. L. 98–369, § 102(e)(4)Par. (2). , substituted “a section 1256 contract” for “a regulated futures contract”.

Pub. L. 97–4481983— inserted reference to a regulated futures contract (as defined in section 1256) not described in paragraph (1) which is a capital asset in the hands of the taxpayer.

Statutory Notes and Related Subsidiaries

Effective Date of 2002 Amendment

Pub. L. 107–147Pub. L. 106–554section 412(e) of Pub. L. 107–147section 151 of this titleAmendment by effective as if included in the provisions of the Community Renewal Tax Relief Act of 2000 [H.R. 5662, as enacted by ], to which such amendment relates, see , set out as a note under .

Effective Date of 1997 Amendment

Pub. L. 105–34, title X, § 1003(a)(2)111 Stat. 910

“The amendment made by paragraph (1) [amending this section] shall apply to terminations more than 30 days after the date of the enactment of this Act [].”
, , , provided that:

Effective Date of 1984 Amendment

section 102(e)(4) of Pub. L. 98–369section 102(e)(9) of Pub. L. 98–369section 507(a) of Pub. L. 97–34section 105(e) of Pub. L. 97–448Pub. L. 98–369section 1256 of this titleAmendment by applicable to positions established after , in taxable years ending after that date, except as otherwise provided, and amendment by , applicable as if included in the amendment made by , as amended by , see section 102(f), (g) of , set out as a note under .

Effective Date of 1983 Amendment

Pub. L. 97–448Pub. L. 97–34section 109 of Pub. L. 97–448section 1 of this titleAmendment by effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981, , to which such amendment relates, see , set out as a note under .

Effective Date

section 508 of Pub. L. 97–34section 1092 of this titleSection applicable to property acquired and positions established by the taxpayer after , in taxable years ending after such date, and applicable when so elected with respect to property held on , see , set out as a note under .