,,ii  #aag? ,,congress  #a/ ,session    
,s4 #bfba  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,augu/ #e1 #bjba,mr4   
,wyd5 introduc$ ! foll[+ bill2 :i* 0    
read twice & ref]r$ to ! ,committee on  
,f9ance  ,a ,,bill  ,to am5d ! ,int]nal 
,rev5ue ,code ( #aihf to mod]nize ! tax 
treatm5t ( d]ivatives & _! und]ly+      
inve/m5ts1 & = o!r purposes4  #a4 ,%ort 
title  7a7 ,%ort title ,?is ,act may be 
cit$ z ! ,mod]nization ( ,d]ivatives    
,tax ,act ( #bjba4  7b7 ,am5dm5t ( #aihf
 ,code ,except z o!rwise expressly      
provid$1 :5ev] 9 ?is ,act an am5dm5t or 
repeal is express$ 9 t]ms ( an am5dm5t  
to1 or repeal (1 a section or o!r       
provision1 ! ref]5ce %all be consid]$ to
 be made to a section or o!r provision (
 ! ,int]nal ,rev5ue ,code ( #aihf4  #b4 
,mod]nization ( tax treatm5t ( c]ta9    
d]ivatives  7a7 ,9 ,g5]al ,sub*apt] ,e (
 *apt] #a is am5d$ by add+ at ! end !   
foll[+ new "p3  ,,iv ,tax treatm5t (    
d]ivatives & simil> contracts  ,subp>t  
,a4 ,derivatives,subpart ,b4 ,simil>    

contracts  ,a ,d]ivatives  ,sec4 #dia4  
,rules = treatm5t ( d]ivatives4,sec4    
#dib4 ,inve/m5t h$g+ units4,sec4 #dic4  
,d]ivative def9$4  #dia4 ,rules =       
treatm5t ( d]ivatives  7a7 ,9 g5]al ,=  
purposes ( ?is title1 if !re is a       
taxable ev5t ) respect to a d]ivative or
 an und]ly+ inve/m5t-- 7#a7 not)/&+ any 
o!r provision ( ?is title1 except z     
provid$ 9 subsection 7b77#c77;,a7 or    
section #ajcb1 ga9 or loss %all be      
recogniz$ & tak5 into acc\nt 9 ! taxable
 ye> 9 :i* ! taxable ev5t occurs1 &     
7#b7 prop] adju/m5t %all be made 9 !    
am\nt ( any subsequ5t ga9 or loss = ga9 
or loss tak5 into acc\nt by reason (    
p>agraph 7#a74  7b7 ,rules relat+ to ga9
 or loss ,not)/&+ any o!r provision (   
?is title-- 7#a7 ,"* & s\rce ( ga9 or   
loss  7,a7 ,"* ,except z provid$ 9      
p>agraph 7#c77;,a71 any item ( income1  
d$uction1 ga91 or loss tak5 into acc\nt 
"u subsection 7a7 ) respect to a taxable
 ev5t %all be treat$ z-- 7i7 ord9>y     
income or loss1 &  7ii7 attributable to 

a trade or bus9ess ( ! taxpay] =        
purposes ( sections #fb7;a7 &           
#agb7;d77#d74  7,b7 ,s\rce ( ga9 or loss
 f d]ivatives ,9 ! case ( a taxable ev5t
 ) respect to a d]ivative1 any item (   
income1 d$uction1 ga91 or loss tak5 into
 acc\nt "u subsection 7a7 %all be treat$
 z d]iv$ f s\rces )9 ! c\ntry (         
resid5ce1 incorporation1 or organization
 ( ! taxpay]4  7#b7 ,det]m9ation ( am\nt
  7,a7 ,9 g5]al ,! am\nt ( ga9 or loss  
tak5 into acc\nt "u subsection 7a7 )    
respect to a taxable ev5t %all be-- 7i7 
9 ! case ( a taxable ev5t involv+ !     
t]m9ation or transf] ( a d]ivative or ! 
sale or ex*ange ( an und]ly+ inve/m5t1 !
 am\nt ( ga9 or loss det]m9$ "u ?is     
title ) respect to ! taxable ev5t1 or   
7ii7 9 ! case ( any o!r taxable ev5t1 ! 
am\nt ( ga9 or loss :i* w\ld be det]m9$ 
"u ?is title if1 imm$iately be=e !      
taxable ev5t-- 7,i7 9 ! case ( a        
d]ivative1 ! d]ivative 7 t]m9at$ or     
transf]r$ at its fair m>ket value1 or   
7,,ii7 9 ! case ( an und]ly+ inve/m5t1 !

 inve/m5t 7 sold or ex*ang$ at its fair 
m>ket value4  7,b7 ,reliance on         
valuation ,= purposes ( subp>agraph     
7,a71 ! taxpay] may rely on a valuation 
:i* is-- 7i7 provid$ to ! taxpay] by a  
brok] "u section #fjde7;b71 or  7ii7    
det]m9$ "u an applicable f9ancial       
/atem5t4  7#c7 ,special rules = taxable 
ev5ts ) respect to inve/m5t h$g+ units  
7,a7 ,9 g5]al ,9 ! case ( a taxable ev5t
 describ$ 9 subsection 7c77#b7 ) respect
 to a d]ivative or und]ly+ inve/m5t 7o!r
 ?an a t]m9ation or transf] ( !         
d]ivative or ! sale or ex*ange ( !      
und]ly+ inve/m5t7-- 7i7 not)/&+         
subsection 7a71 built-9 loss 7if any7 ) 
respect to ! d]ivative or und]ly+       
inve/m5t %all n be recogniz$ & %all n be
 tak5 into acc\nt by reason ( su*       
taxable ev5t1 &  7ii7 not)/&+ p>agraph  
7#a71 built-9 ga9 7if any7 ) respect to 
! und]ly+ inve/m5t %all be treat$ z     
long-t]m or %ort-t]m capital ga9 if !   
built-9 ga9 w\ld h be5 s treat$ if !    
inve/m5t 7 sold or ex*ang$ at its fair  

m>ket value imm$iately be=e ! "t t !    
built-9 ga9 is det]m9$ "u subp>agraph   
7,d74  7,b7 ,id5tification ,= purposes (
 ?is p>agraph1 ! det]m9ation ( :i*      
portions ( an und]ly+ inve/m5t h be5    
deem$ sold or ex*ang$ 9 a taxable ev5t  
%all be made 9 ! same mann] z if !re _h 
be5 an actual sale or ex*ange4  7,c7    
,built-9 loss ,= purposes ( ?is section1
 ! t]m built-9 loss means1 ) respect to 
any d]ivative or und]ly+ inve/m5t 9 an  
inve/m5t h$g+ unit1 any loss :i* w\ld h 
be5 recogniz$ & tak5 into acc\nt "u     
subsection 7a7 if ! d]ivative 7 t]m9at$ 
or transf]r$1 or ! und]ly+ inve/m5t 7   
sold or ex*ang$1 at its fair m>ket value
 z ( ! lat] ( ! "t t ! inve/m5t h$g+    
unit 0 e/abli%$ or ! "t t ! d]ivative or
 ! und]ly+ inve/m5t became "p ( !       
inve/m5t h$g+ unit4  7,d7 ,built-9 ga9  
,= purposes ( ?is section1 ! t]m built-9
 ga9 means1 ) respect to any und]ly+    
inve/m5t 9 an inve/m5t h$g+ unit1 any   
ga9 :i* w\ld h be5 recogniz$ & tak5 into
 acc\nt "u subsection 7a7 if ! und]ly+  

inve/m5t 7 sold or ex*ang$ at its fair  
m>ket value z ( ! lat] ( ! "t t !       
inve/m5t h$g+ unit 0 e/abli%$ or ! "t t 
! und]ly+ inve/m5t became "p ( !        
inve/m5t h$g+ unit4  7c7 ,taxable ev5t  
,= purposes ( ?is "p1 ! t]m taxable ev5t
 means-- 7#a7 ) respect to any d]ivative
 :i* is n "p ( an inve/m5t h$g+ unit--  
7,a7 ! t]m9ation or transf] ( su*       
d]ivative1 &  7,b7 ! close ( any taxable
 ye> if ! taxpay] has rights or         
obligations ) respect to su* d]ivative  
at su* "t1 &  7#b7 ) respect to all     
d]ivatives & und]ly+ inve/m5ts :i* are  
"p ( ! same inve/m5t h$g+ unit-- 7,a7 ! 
e/abli%m5t ( ! inve/m5t h$g+ unit1  7,b7
 ! t]m9ation or transf] ( any su*       
d]ivative1  7,c7 ! sale or ex*ange ( all
 or any portion ( any su* und]ly+       
inve/m5t1  7,d7 ! ent]+ into ( ano!r    
d]ivative1 or ! acquisition ( an        
additional am\nt ( su* und]ly+ inve/m5t1
 aft] ! e/abli%m5t ( ! inve/m5t h$g+    
unit if su* d]ivative or additional     
am\nt is treat$ z "p ( ! inve/m5t h$g+  

unit "u section #dib1 &  7,e7 9 ! case  
(-- 7i7 an inve/m5t h$g+ unit ) respect 
to :i* an election is 9 effect "u       
section #dib7;b71 ! close ( ea* bus9ess 
day1 &  7ii7 any o!r inve/m5t h$g+ unit1
 ! close ( any taxable ye> if !         
applicable h$g+ p]iod ) respect to su*  
unit includes su* close4  7#c7          
,t]m9ation or transf] ,= purposes ( ?is 
"p1 ! t]m t]m9ation or transf] includes1
 ) respect to any d]ivative1 any        
t]m9ation or transf] by (fsett+1 by tak+
 or mak+ deliv]y1 by ex]cise or be+     
ex]cis$1 by assignm5t or be+ assign$1 by
 lapse1 by sale or o!r disposition1 by  
assumption1 or o!rwise4  7d7 ,treatm5t (
 paym5ts ) respect to c]ta9 d]ivatives  
,not)/&+ any o!r provision ( ?is title--
 7#a7 ,9 g5]al ,except z provid$ by !   
,secret>y1 9 ! case ( a paym5t pursuant 
to a d]ivative 7o!r ?an an option7--    
7,a7 any item ( income1 d$uction1 ga91  
or loss ) respect to ! paym5t %all be   
tak5 into acc\nt = purposes ( ?is title 
at ! "t ( ! paym5t1 &  7,b7 prop]       

adju/m5t %all be made 9 ! am\nt ( any   
subsequ5t ga9 or loss = items tak5 into 
acc\nt by reason ( subp>agraph 7,a74    
,?is p>agraph %all n apply to a paym5t 9
 connection ) a taxable ev5t4  7#b7     
,rules relat+ to "* & s\rce ( ga9 or    
loss ,9 ! case ( any item ( income1     
d$uction1 ga91 or loss ) respect to     
paym5ts describ$ 9 p>agraph 7#a7-- 7,a7 
! rules ( subsection 7b77#a77;,a7 %all  
apply 9 det]m9+ ! "* ( su* item1 &  7,b7
 except z provid$ 9 section #hga7m71 !  
rule ( subsection 7b77#a77;,b7 %all     
apply 9 det]m9+ ! s\rce ( su* item4  7e7
 ,susp5sion ( hold+ p]iod :ile und]ly+  
inve/m5t "p ( inve/m5t h$g+ unit ,=     
purposes ( section #abbb1 9 ! case ( any
 und]ly+ inve/m5t :i* is "p ( an        
inve/m5t h$g+ unit1 ! hold+ p]iod = su* 
inve/m5t %all n include any p]iod dur+  
:i* ! und]ly+ inve/m5t is "p ( su* unit4
  7f7 ,applicable f9ancial /atem5t ,=   
purposes ( ?is "p1 ! t]m applicable     
f9ancial /atem5t means-- 7#a7 a f9ancial
 /atem5t :i* is c]tifi$ z be+ prep>$ 9  

accordance ) g5]ally accept$ acc\nt+    
pr9ciples & :i* is-- 7,a7 a #aj-,k 7or  
successor =m71 or annual /atem5t to     
%>ehold]s1 requir$ to be fil$ by !      
taxpay] ) ! ,unit$ ,/ates ,securities & 
,ex*ange ,commission1  7,b7 an audit$   
f9ancial /atem5t ( ! taxpay] :i* is us$ 
=-- 7i7 cr$it purposes1  7ii7 report+ to
 %>ehold]s1 p>tn]s1 or o!r proprietors1 
or to b5efici>ies1 or  7iii7 any o!r    
sub/antial nontax purpose1  b only if   
!re is no /atem5t ( ! taxpay] describ$ 9
 subp>agraph 7,a71 or  7,c7 fil$ by !   
taxpay] ) any o!r ,f$]al ag5cy =        
purposes o!r ?an ,f$]al tax purposes1 b 
only if !re is no /atem5t ( ! taxpay]   
describ$ 9 subp>agraph 7,a7 or 7,b71    
7#b7 a f9ancial /atem5t :i* is made on !
 basis ( int]national f9ancial report+  
/&>ds & is fil$ by ! taxpay] ) an ag5cy 
( a =eign gov]nm5t :i* is equival5t to !
 ,unit$ ,/ates ,securities & ,ex*ange   
,commission & :i* has report+ /&>ds n   
less /r+5t ?an ! /&>ds requir$ by su*   
,commission1 b only if !re is no /atem5t

 ( ! taxpay] describ$ 9 p>agraph 7#a71  
or  7#c7 a f9ancial /atem5t fil$ by !   
taxpay] ) any o!r regulatory or         
gov]nm5tal body specifi$ by ! ,secret>y1
 b only if !re is no /atem5t ( ! taxpay]
 describ$ 9 p>agraph 7#a7 or 7#b74      
#dib4 ,inve/m5t h$g+ units  7a7         
,inve/m5t h$g+ unit ,= purposes ( ?is   
"p-- 7#a7 ,9 g5]al ,except z provid$ 9  
subsection 7b7-- 7,a7 a taxpay] %all be 
treat$ z hav+ an inve/m5t h$g+ unit )   
respect to an und]ly+ inve/m5t dur+ any 
applicable h$g+ p]iod ) respect to !    
und]ly+ inve/m5t1 &  7,b7 subject to    
p>agraph 7#c71 su* inve/m5t h$g+ unit   
%all at any "t dur+ ! applicable h$g+   
p]iod consi/ ( ! foll[+ held by !       
taxpay] at su* "t3 7i7 ,ea* d]ivative ) 
respect to ! und]ly+ inve/m5t :i* has a 
delta ) respect to any portion ( !      
und]ly+ inve/m5t :i* is )9 ! range      
beg9n+ ) m9us #j4g & end+ ) m9us #a4j4  
7ii7 ,ea* portion ( ! und]ly+ inve/m5t  
describ$ 9 clause 7i7 ) respect to :i*  
any d]ivative has a delta )9 ! range    

describ$ 9 clause 7i74  7#b7 ,applicable
 h$g+ p]iod ,! t]m applicable h$g+ p]iod
 means1 ) respect to any und]ly+        
inve/m5t ( a taxpay]1 a cont9u\s p]iod--
 7,a7 beg9n+ ) ! fir/ "t 7aft] a p]iod  
:i* is n an applicable h$g+ p]iod7 !    
taxpay] holds #a or m ( ! d]ivatives )  
respect to ! und]ly+ inve/m5t1 & #a or m
 portions ( ! und]ly+ inve/m5t1 :i* are 
describ$ 9 p>agraph 7#a77;,b71 &  7,b7  
end+ ) ! "t none ( su* d]ivatives &     
portions are s describ$4  7#c7 ,special 
rules relat+ to delta & comb9+          
d]ivatives  7,a7 ,9 g5]al ,= purposes ( 
?is subsection-- 7i7 a d]ivative )      
respect to an und]ly+ inve/m5t %all be  
treat$ z hav+ a delta )9 ! range        
describ$ 9 p>agraph 7#a77;,b77i7 if !   
d]ivative by itself1 or 9 comb9ation )  
#a or m o!r d]ivatives1 has su* delta ) 
respect to any portion ( su* und]ly+    
inve/m5t1 &  7ii7 ! det]m9ation "u      
p>agraph 7#a77;,b7 ( :i* d]ivatives h   
su* delta1 & ea* portion ( ! und]ly+    
inve/m5t ) respect to :i* su* d]ivatives

 h su* delta1 %all be made 9 ! mann] :i*
 results 9 ! l>ge/ portion ( su* und]ly+
 inve/m5t be+ s describ$4  7,b7         
,secret>ial au?ority = applicable trad$ 
d]ivatives ,! ,secret>y may prescribe   
regulations or o!r guidance to modify ! 
rules "u subp>agraph 7,a7 to simplify ! 
application ( su* rules to applicable   
trad$ d]ivatives4  7#d7 ,applicable     
trad$ d]ivatives ,= purposes ( p>agraph 
7#c7-- 7,a7 ,9 g5]al ,! t]m applicable  
trad$ d]ivative means any li/$ option or
 regulat$ futures contract4  7,b7       
,regulat$ futures contract ,! t]m       
regulat$ futures contract means a       
contract-- 7i7 ) respect to :i* ! am\nt 
requir$ to be deposit$ & ! am\nt :i* may
 be )drawn dep5ds on a sy/em ( m>k+ to  
m>ket1 &  7ii7 :i* is trad$ on 7or      
subject to ! rules (7 a qualifi$ bo>d or
 ex*ange4  7,c7 ,li/$ option ,! t]m li/$
 option means any option 7o!r ?an a "r  
to acquire /ock f ! issu]7 :i* is trad$ 
on 7or subject to ! rules (7 a qualifi$ 
bo>d or ex*ange4  7,d7 ,qualifi$ bo>d or

 ex*ange ,! t]m qualifi$ bo>d or ex*ange
 means-- 7i7 a national securities      
ex*ange :i* is regi/]$ ) ! ,securities &
 ,ex*ange ,commission1  7ii7 a dome/ic  
bo>d ( trade designat$ z a contract     
m>ket by ! ,commodity ,futures ,trad+   
,commission1 or  7iii7 any o!r ex*ange1 
bo>d ( trade1 or o!r m>ket :i* !        
,secret>y det]m9es has rules adequate to
 c>ry out ! purposes ( ?is "p4  7b7     
,election ) respect to items includ$ 9  
inve/m5t h$g+ unit  7#a7 ,9 g5]al ,=    
purposes ( ?is "p1 a taxpay] may elect  
to treat all d]ivatives ) respect to an 
und]ly+ inve/m5t1 & all ( su* und]ly+   
inve/m5t1 z "p ( an inve/m5t h$g+ unit4 
7#b7 ,election ,any election "u ?is     
subsection ) respect to an und]ly+      
inve/m5t-- 7,a7 %all apply to all       
d]ivatives ) respect to su* und]ly+     
inve/m5t1 & all ( su* und]ly+ inve/m5t1 
held at any "t aft] ! election is made  
7includ+ dur+ any p]iod su* d]ivatives  
or und]ly+ inve/m5t are n held          
simultane\sly71 &  7,b7 %all be         

irrevocable4  7#c7 ,deem$ election =    
taxpay]s fail+ to id5tify  7,a7 ,9 g5]al
 ,if a taxpay]-- 7i7 does n h an        
election 9 effect "u p>agraph 7#a7 )    
respect to an und]ly+ inve/m5t1 &  7ii7 
fails to meet ! requirem5ts ( subsection
 7c7 = te/+ & id5tify+ d]ivatives )     
respect to ! und]ly+ inve/m5t1  !       
taxpay] %all be treat$ z hav+ made !    
election "u p>agraph 7#a74  7,b7        
,treatm5t ( election ,= purposes (      
p>agraph 7#b71 a deem$ election "u ?is  
p>agraph-- 7i7 %all be treat$ z made z (
 ! fir/ "t ! taxpay] fails to meet !    
requirem5ts ( subsection 7c7 ) respect  
to ! und]ly+ inve/m5t1 &  7ii7 not)/&+  
p>agraph 7#b77;,b71 may be revok$ ) !   
cons5t ( ! ,secret>y4  7c7 ,def9itions &
 rules relat+ to taxpay]s id5tify+      
inve/m5t h$g+ units ,9 ! case ( a       
taxpay] ) respect to :i* an election is 
n 9 effect "u subsection 7b7 ) respect  
to an und]ly+ inve/m5t-- 7#a7 ,9 g5]al  
,! taxpay] %all1 at ! times describ$ 9  
p>agraph 7#c71 te/ ! d]ivatives )       

respect to ! und]ly+ inve/m5t & make !  
id5tifications describ$ 9 p>agraph 7#b74
  7#b7 ,id5tification  7,a7 ,9 g5]al ,! 
taxpay] %all id5tify ! foll[+ ) respect 
to an und]ly+ inve/m5t3 7i7 ,ea*        
d]ivative describ$ 9 subsection         
7a77#a77;,b77i74  7ii7 ,ea* portion ( ! 
und]ly+ inve/m5t describ$ 9 subsection  
7a77#a77;,b77ii74  7,b7 ,d]ivatives &   
und]ly+ inve/m5t n "p ( inve/m5t h$g+   
unit ,a taxpay] %all id5tify !          
d]ivatives ) respect to an und]ly+      
inve/m5t1 & ! portions ( ! und]ly+      
inve/m5t1 :i* are n requir$ to be       
id5tifi$ "u subp>agraph 7,a74  7,c7     
,portion may include all ( und]ly+      
inve/m5t ,= purposes ( ?is "p1 ! t]m    
portion ) respect to any und]ly+        
inve/m5t id5tifi$ may include all ( !   
und]ly+ inve/m5t4  7#c7 ,times          
id5tifications requir$ to be made  7,a7 
,9 g5]al ,! taxpay] %all te/ & make !   
id5tifications requir$ "u ?is subsection
 at ! foll[+ times dur+ any cont9u\s    
p]iod ! taxpay] simultane\sly holds #a  

or m d]ivatives ) respect to an und]ly+ 
inve/m5t & #a or m portions ( ! und]ly+ 
inve/m5t3 7i7 ,! beg9n+ ( ! p]iod4  7ii7
 ,imm$iately aft] ! taxpay] 7dur+ su*   
p]iod7-- 7,i7 ent]s into ano!r d]ivative
 ) respect to ! und]ly+ inve/m5t or     
acquires an additional am\nt ( su*      
und]ly+ inve/m5t1 or  7,,ii7 t]m9ates or
 transf]s #a or m d]ivatives ) respect  
to ! und]ly+ inve/m5t or sells or       
ex*anges any portion ( ! und]ly+        
inve/m5t1 except t no te/+ &            
id5tification %all be requir$ "u ?is    
subclause ) respect to any su*          
transaction if ! taxpay] does n h an    
inve/m5t h$g+ unit ) respect to !       
und]ly+ inve/m5t imm$iately be=e su*    
transaction4  7iii7 ,su* o!r times dur+ 
su* p]iod z ! ,secret>y may prescribe by
 regulations or o!r guidance4  7,b7 ,no 
o!r times = te/+ ,except z provid$ by ! 
,secret>y1 !re %all n be tak5 into      
acc\nt = purposes ( ?is "p any te/+ &   
id5tification done by ! taxpay] )       
respect to an und]ly+ inve/m5t at a "t  

o!r ?an ! times requir$ "u subp>agraph  
7,a74  7#d7 ,mann] ,a taxpay] %all be   
treat$ z timely mak+ ! id5tifications   
requir$ "u ?is subsection if !          
d]ivatives ) respect to1 & ea* portion  
(1 an und]ly+ inve/m5t are cle>ly       
id5tifi$ z "p ( 7or z n "p (7 ! inve/m5t
 h$g+ unit = purposes ( ?is p>agraph    
be=e ! close ( ! day on :i* !           
id5tification is requir$ 7or su* o!r "t 
z ! ,secret>y may prescribe74  7#e7     
,treatm5t ( incorrect id5tification ,!  
,secret>y %all prescribe regulations or 
o!r guidance to prop]ly *>act]ize any   
income1 ga91 exp5se1 or loss aris+ f any
 d]ivative or und]ly+ inve/m5t :i* is   
incorrectly id5tifi$ "u p>agraph 7#b7 z 
be+ "p (1 or n be+ "p (1 an inve/m5t    
h$g+ unit4  7d7 ,delta ,= purposes ( ?is
 section-- 7#a7 ,9 g5]al ,! t]m delta   
means1 ) respect to any d]ivative &     
und]ly+ inve/m5t1 ! ratio ( ! expect$   
*ange 9 ! fair m>ket value ( ! d]ivative
 to a v small *ange 9 ! fair m>ket value
 ( ! und]ly+ inve/m5t4  7#b7 ,me?od (   

det]m9ation ,! delta ) respect to any   
d]ivative ) respect to an und]ly+       
inve/m5t 7or any comb9ation ( su*       
d]ivatives7 %all be det]m9$-- 7,a7 9 a  
comm]cially reasonable mann]1 &  7,b7   
except z provid$ by ! ,secret>y1 9 a    
mann] :i* is consi/5t ) ! mann] us$ by !
 taxpay] or ! taxpay]'s brok] = purposes
 ( an applicable f9ancial /atem5t4  7#c7
 ,"t = mak+ det]m9ation ,! delta )      
respect to any d]ivative & und]ly+      
inve/m5t %all be det]m9$ z ( any date ! 
taxpay] is requir$ to make !            
id5tifications describ$ 9 subsection    
7c74  7#d7 ,multiple und]ly+ inve/m5ts  
7,a7 ,9 g5]al ,except z provid$ 9       
subp>agraph 7,b71 if ! value ( a        
d]ivative is det]m9$ by ref]5ce to m ?an
 #a und]ly+ inve/m5t1 ! delta %all be   
det]m9$ sep>ately ) respect to ea*      
und]ly+ inve/m5t4  7,b7 ,me?ods =       
comb9ations ( und]ly+ inve/m5ts ,!      
,secret>y may provide me?ods = det]m9+ !
 delta ( any d]ivative ) respect to     
comb9ations ( #b or m und]ly+ inve/m5ts4

  7e7 ,o!r def9itions & rules ,=        
purposes ( ?is "p-- 7#a7 ,und]ly+       
inve/m5t  7,a7 ,9 g5]al ,! t]m und]ly+  
inve/m5t means1 ) respect to any        
d]ivative1 any item-- 7i7 :i* is        
describ$ 9 any ( ! p>agraphs 7#a7 ?r\gh 
7#h7 ( section #dic7;a7 7or any item    
sub/antially ! same z any su* item71 &  
7ii7 by ref]5ce to :i* ! value ( !      
d]ivative1 or any paym5t or o!r transf] 
) respect to ! d]ivative1 is det]m9$    
ei!r directly or indirectly4  7,b7      
,coord9ation ) section #dge ,9 ! case ( 
a deal] 9 securities to :i* section #dge
 applies 7& a deal] 9 commodities )     
respect to :i* an election is 9 effect  
"u section #dge7;e771 su* t]m %all n    
include any item :i*1 b = ?is           
subp>agraph1 w\ld be treat$ z an und]ly+
 inve/m5t if su* item is treat$ z a     
security "u section #dge 7includ+ a     
commodity treat$ z a security "u section
 #dge7;e774  7,c7 ,indirect det]m9ations
 ,= purposes ( subp>agraph 7,a77ii71 !  
value (1 or any paym5t or o!r transf] ) 

respect to1 a d]ivative %all n be treat$
 z indirectly det]m9$ by ref]5ce to "o  
or m ( ! items describ$ 9 p>agraphs 7#a7
 ?r\gh 7#h7 ( section #dic7;a7 solely   
because ! *ange 9 a v>iable affect+ su* 
value1 paym5t1 or o!r transf] also      
affects ! value1 level1 am\nt1 or       
calculation ( su* item or items4  7#b7  
,e/abli%m5t ( inve/m5t h$g+ unit ,a     
taxpay] %all be treat$ z hav+ e/abli%$  
an inve/m5t h$g+ unit ) respect to an   
und]ly+ inve/m5t-- 7,a7 9 ! case ( a    
taxpay] ) an election 9 effect "u       
subsection 7b7 ) respect to ! und]ly+   
inve/m5t1 z ( ! date ! election takes   
effect1 &  7,b7 9 ! case ( any o!r      
taxpay]1 z ( ! beg9n+ ( ea* applicable  
h$g+ p]iod ) respect to ! und]ly+       
inve/m5t4  7#c7 ,relat$ p>ties1 etc ,=  
purposes ( ?is section-- 7,a7           
,attribution betwe5 relat$ p]sons ,any  
d]ivative or und]ly+ inve/m5t held by a 
relat$ p>ty 7)9 ! mean+ ( subsection    
7f77 ) respect to ! taxpay] %all be     
treat$ z held by ! taxpay]4  7,b7 ,c]ta9

 pass-?r\gh entities ,if "p or all ( !  
income1 ga91 loss1 or exp5se ) respect  
to a d]ivative or und]ly+ inve/m5t held 
by a p>tn]%ip1 tru/1 or o!r entity w\ld 
prop]ly be tak5 into acc\nt = purposes (
 ?is *apt] by ! taxpay]1 !n1 except to !
 ext5t o!rwise provid$ by ! ,secret>y1  
su* d]ivative or inve/m5t %all be treat$
 z held by ! taxpay]4  7,c7 ,/ock & debt
 ^: value prim>ily det]m9$ by ref]5ce to
 o!r items ,except z provid$ by !       
,secret>y1 if ! taxpay] holds an item   
describ$ 9 p>agraph 7#a7 or 7#c7 (      
section #dic7;a7 ! value ( :i*1 or )    
respect to :i* any paym5t or o!r        
transf]1 is prim>ily det]m9$ by ref]5ce 
to "o or m o!r items describ$ 9         
p>agraphs 7#a7 ?r\gh 7#h7 ( section     
#dic7;a71 !n1 solely = purposes ( ?is   
subp>t1 su* item describ$ 9 p>agraph    
7#a7 or 7#c7 ( section #dic7;a7 %all    
also be treat$ z if x 7 su* o!r item4   
7f7 ,relat$ p>ty ,= purposes ( ?is      
section-- 7#a7 ,9 g5]al ,a p]son is a   
relat$ p>ty to ! taxpay] if1 ) respect  

to any p]iod dur+ :i* a d]ivative or    
und]ly+ inve/m5t is held by su* p]son1  
su* p]son-- 7,a7 is ! taxpay]'s sp\se1  
7,b7 is a dep5d5t ( ! taxpay] or any o!r
 taxpay] ) respect to :om ! taxpay] is a
 dep5d5t1  7,c7 is an individual1       
corporation1 p>tn]%ip1 tru/1 or e/ate   
:i* controls1 or is controll$ by 7)9 !  
mean+ ( section #ied7;d77#c771 ! taxpay]
 or any individual describ$ 9           
subp>agraph 7,a7 or 7,b7 ) respect to ! 
taxpay] 7or any comb9ation !re(71  7,d7 
is an individual retirem5t plan1 ,ar*]  
,,msa 7z def9$ 9 section #bbj7;d771 or  
heal? sav+s acc\nt 7z def9$ 9 section   
#bbc7;d771 ( ! taxpay] or ( any         
individual describ$ 9 subp>agraph 7,a7  
or 7,b7 ) respect to ! taxpay]1  7,e7 is
 an acc\nt "u a qualifi$ tuition program
 describ$ 9 section #ebi1 an ,,able     
acc\nt 7z def9$ 9 section               
#ebi;,a7e77#f771 or a ,cov]dell         
education sav+s acc\nt 7z def9$ 9       
section #ecj7;b77 if ! taxpay]1 or any  
individual describ$ 9 subp>agraph 7,a7  

or 7,b7 ) respect to ! taxpay]1 is !    
designat$ b5efici>y ( su* acc\nt or has 
! "r to make any decision ) respect to !
 inve/m5t ( any am\nt 9 su* acc\nt1     
7,f7 is an acc\nt "u-- 7i7 a plan       
describ$ 9 section #dja7;a71  7ii7 an   
annuity plan describ$ 9 section         
#djc7;a71  7iii7 an annuity contract    
describ$ 9 section #djc7;b71 or  7iv7 an
 eligible def]r$ comp5sation plan       
describ$ 9 section #deg7;b7 & ma9ta9$ by
 an employ] describ$ 9 section          
#deg7;e77#a77;,a71  if ! taxpay] or any 
individual describ$ 9 subp>agraph 7,a7  
or 7,b7 ) respect to ! taxpay] has ! "r 
to make any decision ) respect to !     
inve/m5t ( any am\nt 9 su* acc\nt1 or   
7,g7 files a consolidat$ return 7)9 !   
mean+ ( section #aeja7 ) ! taxpay] = any
 taxable ye> :i* includes a portion (   
su* p]iod4  7#b7 ,det]m9ation ( m>ital  
/atus  7,a7 ,9 g5]al ,except z provid$ 9
 subp>agraph 7,b71 m>ital /atus %all be 
det]m9$ "u section #ggjc4  7,b7 ,special
 rule = m>ri$ individuals fil+ sep>ately

 & liv+ ap>t ,a husb& & wife :o-- 7i7   
file sep>ate returns = any taxable ye>1 
&  7ii7 live ap>t at all times dur+ su* 
taxable ye>1  %all n be treat$ z m>ri$  
individuals4  7g7 ,regulations ,!       
,secret>y %all prescribe su* regulations
 or o!r guidance z may be appropriate to
 c>ry out ?is section1 includ+          
regulations or guidance :i* require 9   
appropriate cases a taxpay] to bifurcate
 d]ivatives describ$ 9 subsection       
7d77#d7 = purposes ( apply+ ?is "p or   
:i* may be necess>y to prev5t !         
avoidance ( ! purposes ( subsection 7f7 
7includ+ treat+ p]sons z relat$ p>ties  
if su* p]sons are =m$ or avail$ ( to    
avoid ! purposes ( su* subsection74     
#dic4 ,d]ivative def9$  7a7 ,9 g5]al ,= 
purposes ( ?is "p1 except z o!rwise     
provid$ 9 ?is section1 ! t]m d]ivative  
means any contract 7includ+ any option1 
=w>d contract1 futures contract1 %ort   
position1 swap1 or simil> contract7 !   
value ( :i*1 or any paym5t or o!r       
transf] ) respect to :i*1 is 7directly  

or indirectly7 det]m9$ by ref]5ce to "o 
or m ( ! foll[+3 7#a7 ,any %>e ( /ock 9 
a corporation4  7#b7 ,any p>tn]%ip or   
b5eficial own]%ip int]e/ 9 a p>tn]%ip or
 tru/4  7#c7 ,any evid5ce ( indebt$ness4
  7#d7 ,except z provid$ 9 subsection   
7b77#a71 any real prop]ty4  7#e7 ,any   
commodity :i* is actively trad$ 7)9 !   
mean+ ( section #ajib7;c77#d774  7#f7   
,any curr5cy4  7#g7 ,any rate1 price1   
am\nt1 index1 =mula1 or algori?m4  7#h7 
,any o!r item :i* ! ,secret>y may       
prescribe4  ,except z provid$ by !      
,secret>y to prev5t ! avoidance ( !     
purposes ( ?is "p1 su* t]m %all n       
include any item describ$ 9 p>agraphs   
7#a7 ?r\gh 7#h74 ,= purposes ( ?is      
subsection1 ! value (1 or any paym5t or 
o!r transf] ) respect to1 a contract    
%all n be treat$ z indirectly det]m9$ by
 ref]5ce to "o or m ( ! items describ$ 9
 p>agraphs 7#a7 ?r\gh 7#h7 solely       
because ! *ange 9 a v>iable affect+ su* 
value1 paym5t1 or o!r transf] also      
affects ! value1 level1 am\nt1 or       

calculation ( su* item or items4  7b7   
,exceptions  7#a7 ,c]ta9 real prop]ty   
7,a7 ,9 g5]al ,= purposes ( ?is "p1 !   
t]m d]ivative %all n include any        
contract ) respect to int]e/s 9 real    
prop]ty 7z def9$ 9 section              
#hef7;c77#e77;,c77 if su* contract      
requires physical deliv]y ( su* real    
prop]ty4  7,b7 ,options to settle 9 ca% 
7i7 ,9 g5]al ,= purposes ( subp>agraph  
7,a71 a contract :i* provides = an      
option ( ca% settlem5t %all n be treat$ 
z requir+ physical deliv]y ( real       
prop]ty unless ! option is ex]cisable   
only 9 unusual & exceptional            
circum/ances4  7ii7 ,option ( ca%       
settlem5t ,= purposes ( clause 7i71 a   
contract provides an option ( ca%       
settlem5t if ! contract settles 9 7or   
c\ld be settl$ 97 ca% or prop]ty o!r ?an
 ! und]ly+ real prop]ty4  7#b7 ,h$g+    
transactions  7,a7 ,9 g5]al ,= purposes 
( ?is "p1 ! t]m d]ivative %all n include
 any contract :i* is "p ( a h$g+        
transaction 7z def9$ 9 section          

#abba7;b774  7,b7 ,section #ihh h$g+    
transactions ,= exception = section #ihh
 h$g+ transactions1 see section         
#ihh7;d77#a74  7#c7 ,securities l5d+1   
sale-repur*ase1 & simil> f9anc+         
transactions ,to ! ext5t provid$ by !   
,secret>y1 = purposes ( ?is "p1 ! t]m   
d]ivative %all n include ! "r to !      
return ( ! same or sub/antially id5tical
 securities transf]r$ 9 a securities    
l5d+ transaction1 sale-repur*ase        
transaction1 or simil> f9anc+           
transaction4  7#d7 ,options receiv$ 9   
connection ) ! p]=mance ( s]vices ,=    
purposes ( ?is "p1 ! t]m d]ivative %all 
n include any option describ$ 9 section 
#hc7;e77#c7 receiv$ 9 connection ) !    
p]=mance ( s]vices4  7#e7 ,insurance1   
annuity1 & end[m5t contracts ,= purposes
 ( ?is "p1 ! t]m d]ivative %all n       
include any insurance1 annuity1 or      
end[m5t contract issu$ by an insurance  
company to :i* sub*apt] ,l applies 7or  
issu$ by any =eign corporation to :i*   
su* sub*apt] w\ld apply if su* =eign    

corporation 7 a dome/ic corporation74   
7#f7 ,d]ivatives ) respect to /ock (    
memb]s ( same worldwide affiliat$ gr\p  
7,a7 ,9 g5]al ,= purposes ( ?is "p1 !   
t]m d]ivative %all n include any        
d]ivative 7det]m9$ )\t reg>d to ?is     
p>agraph7 ) respect to /ock issu$ by any
 memb] ( ! same worldwide affiliat$ gr\p
 9 :i* ! taxpay] is a memb]4  7,b7      
,worldwide affiliat$ gr\p ,= purposes ( 
?is p>agraph1 ! t]m worldwide affiliat$ 
gr\p means a gr\p consi/+ (-- 7i7 !     
includible memb]s ( an affiliat$ gr\p 7z
 def9$ 9 section #aejd7;a71 det]m9$ )\t 
reg>d to p>agraph 7#b7 ( section        
#aejd7;b771 &  7ii7 all controll$ =eign 
corporations 9 :i* su* memb]s 9 !       
aggregate meet ! own]%ip requirem5ts (  
section #aejd7;a77#b7 ei!r directly or  
indirectly ?r\gh apply+ p>agraph 7#b7 ( 
section #ieh7;a7 or ?r\gh apply+ rules  
simil> to ! rules ( su* p>agraph to /ock
 own$ directly or indirectly by dome/ic 
p>tn]%ips1 tru/s1 or e/ates4  7#g7      
,commodities us$ 9 normal c\rse ( trade 

or bus9ess ,= purposes ( ?is "p1 ! t]m  
d]ivative %all n include any contract ) 
respect to any commodity if-- 7,a7 su*  
contract requires physical deliv]y ) !  
option ( ca% settlem5t only 9 unusual & 
exceptional circum/ances1 &  7,b7 su*   
commodity is us$ 7& is us$ 9 quantities 
) respect to :i* su* d]ivative relates7 
9 ! normal c\rse ( ! taxpay]'s trade or 
bus9ess 7or1 9 ! case ( an individual1 =
 p]sonal consumption74  7c7 ,contracts )
 emb$d$ d]ivative compon5ts  7#a7 ,9    
g5]al ,if a contract has d]ivative &    
nond]ivative compon5ts1 !n ea* d]ivative
 compon5t %all be treat$ z a d]ivative =
 purposes ( ?is "p4 ,if ! d]ivative     
compon5t _c be sep>ately valu$1 !n !    
entire contract %all be treat$ z a      
d]ivative = purposes ( ?is "p4  7#b7    
,exception = c]ta9 emb$d$ d]ivative     
compon5ts ( debt in/rum5ts ,a debt      
in/rum5t %all n be treat$ z hav+ a      
d]ivative compon5t m]ely because-- 7,a7 
su* debt in/rum5t is d5om9at$ 9 a       
nonfunctional curr5cy 7z def9$ 9 section

 #ihh7;c77#a77;,c77ii771 or  7,b7       
paym5ts ) respect to su* debt in/rum5t  
are det]m9$ by ref]5ce to ! value ( a   
nonfunctional curr5cy 7z s def9$74  7d7 
,treatm5t ( ,am]ican ,depository        
,receipts & simil> in/rum5ts ,except z  
o!rwise provid$ by ! ,secret>y1 =       
purposes ( ?is "p1 ,am]ican depository  
receipts 7& simil> in/rum5ts7 ) respect 
to %>es ( /ock 9 =eign corporations %all
 be treat$ z %>es ( /ock 9 su* =eign    
corporations4  ,b ,simil> contracts     
,sec4 #did4 ,tax treatm5t ( contracts   
simil> to d]ivatives4  #did4 ,tax       
treatm5t ( contracts simil> to          
d]ivatives  7a7 ,9 g5]al ,= purposes (  
?is title1 if !re is a taxable          
transaction ) respect to any applicable 
prop]ty int]e/1 !n1 not)/&+ any o!r     
provision ( ?is title o!r ?an section   
#ajcb1 ga9 or loss attributable to !    
taxable transaction %all be consid]$ ga9
 or loss f ! sale or ex*ange ( prop]ty  
:i* has ! same "* z ! prop]ty to :i* !  
applicable prop]ty int]e/ relates has   

7or w\ld h7 9 ! h&s ( ! taxpay]4  7b7   
,def9itions ,= purposes ( ?is section-- 
7#a7 ,applicable prop]ty int]e/ ,! t]m  
applicable prop]ty int]e/ means any "r  
or obligation ) respect to prop]ty o!r  
?an-- 7,a7 a d]ivative 7z def9$ 9       
section #dic71 or  7,b7 any position 9  
applicable prop]ty to :i* section #ajib 
applies4  7#b7 ,taxable transaction ,!  
t]m taxable transaction means1 ) respect
 to any applicable prop]ty int]e/-- 7,a7
 any t]m9ation or transf] 7z def9$ 9    
section #dia7;c77#c77 ( su* int]e/1 or  
7,b7 any paym5t 9 fulfillm5t or p>tial  
fulfillm5t ( su* int]e/4  4  #c4        
,coord9ation ( new rules ) exi/+ rules  
7a7 ,coord9ation ) rules = deal]s &     
trad]s  7#a7 ,d]ivatives n treat$ z     
securities ,section #dge7;c77#b7 is     
am5d$-- 7,a7 by add+ & at ! end (       
subp>agraph 7,c71  7,b7 by /rik+        
subp>agraphs 7,d7 & 7,e7 & by r$esignat+
 subp>agraph 7,f7 z subp>agraph 7,d71   
7,c7 by /rik+ subp>agraph 7,a71 7,b71   
7,c71 7,d71 or 7,e7 9 subp>agraph       

7,d77i71 z s r$esignat$1 & ins]t+       
subp>agraph 7,a71 7,b71 or 7,c71 &  7,d7
 by am5d+ ! la/ s5t5ce to read z foll[s3
 ,su* t]m %all n include any d]ivative  
to :i* section #dia7;a7 applies44  7#b7 
,d]ivatives n treat$ z commodities      
,section #dge7;e77#b7 is am5d$-- 7,a7 by
 add+ & at ! end ( subp>agraph 7,a71    
7,b7 by /rik+ subp>agraphs 7,b7 & 7,c7 &
 by r$esignat+ subp>agraph 7,d7 z       
subp>agraph 7,b71 &  7,c7 by /rik+      
subp>agraph 7,a71 7,b7 or 7,c7 9        
subp>agraph 7,b77i71 z s r$esignat$1 &  
ins]t+ subp>agraph 7,a74  7#c7 ,con=m+  
am5dm5ts  7,a7 ,section #dge7;b7 is     
am5d$ by /rik+ p>agraph 7#d74  7,b7     
,section #dge7;d77#b77;,b7 is am5d$--   
7i7 by /rik+ subsection                 
7c77#b77;,f77iii7 & ins]t+ subsection   
7c77#b77;,d77iii71 &  7ii7 by /rik+     
subsection 7c77#b77;,f7 & ins]t+        
subsection 7c77#b77;,d74  7,c7 ,section 
#dge7;f77#a77;,d7 is am5d$ by /rik+     
subsections 7b77#d7 & 7d7 & ins]t+      
subsection 7d74  7b7 ,coord9ation )     

/raddle rules  7#a7 ,9 g5]al ,section   
#ajib is am5d$ to read z foll[s3  #ajib4
 ,/raddles  7a7 ,recognition ( loss 9   
case ( /raddles1 etc  7#a7 ,limitation  
on recognition ( loss  7,a7 ,9 g5]al    
,any loss ) respect to #a or m positions
 %all be tak5 into acc\nt = any taxable 
ye> only to ! ext5t t ! am\nt ( su* loss
 exce$s ! unrecogniz$ ga9 7if any7 )    
respect to #a or m positions :i* 7      
(fsett+ positions ) respect to #a or m  
positions f :i* ! loss arose4  7,b7     
,c>ryov] ( loss ,any loss :i* may n be  
tak5 into acc\nt "u subp>agraph 7,a7 =  
any taxable ye> %all1 subject to !      
limitations "u subp>agraph 7,a71 be     
treat$ z su/a9$ 9 ! succe$+ taxable ye>4
  7#b7 ,unrecogniz$ ga9 ,= purposes (   
?is subsection-- 7,a7 ,9 g5]al ,! t]m   
unrecogniz$ ga9 means-- 7i7 9 ! case (  
any position held by ! taxpay] z ( !    
close ( ! taxable ye>1 ! am\nt ( ga9 :i*
 w\ld be tak5 into acc\nt ) respect to  
su* position if su* position 7 sold on !
 la/ bus9ess day ( su* taxable ye> at   

its fair m>ket value1 &  7ii7 9 ! case (
 any position ) respect to :i*1 z ( !   
close ( ! taxable ye>1 ga9 has be5      
realiz$ b n recogniz$1 ! am\nt ( ga9 s  
realiz$4  7,b7 ,report+ ( ga9 ,ea*      
taxpay] %all disclose to ! ,secret>y1 at
 su* "t & 9 su* mann] & =m z ! ,secret>y
 may prescribe-- 7i7 ea* position 7:e!r 
or n "p ( a /raddle7 ) respect to :i*1 z
 ( ! close ( ! taxable ye>1 !re is      
unrecogniz$ ga91 &  7ii7 ! am\nt ( su*  
unrecogniz$ ga94  ,! ,secret>y may waive
 ! requirem5t to report "u ?is          
subp>agraph ) respect to any position if
 su* report+ is n requir$ to c>ry out ! 
purposes ( ?is section4  7#c7 ,special  
rules = physically settl$ positions ,=  
purposes ( ?is subsection1 if a taxpay] 
settles a position :i* is "p ( a /raddle
 by deliv]+ prop]ty to :i* ! position   
relates 7& su* position1 if t]m9at$1    
w\ld result 9 a realization ( a loss71  
!n su* taxpay] %all be treat$ z if su*  
taxpay]-- 7,a7 t]m9at$ ! position = its 
fair m>ket value imm$iately be=e !      

settlem5t1 &  7,b7 sold ! prop]ty s     
deliv]$ by ! taxpay] at its fair m>ket  
value4  7b7 ,regulations ,! ,secret>y   
%all prescribe su* regulations ) respect
 to ga9 or loss on positions :i* are a  
"p ( a /raddle z may be appropriate to  
c>ry out ! purposes ( ?is section &     
section #bfc7;g74 ,to ! ext5t consi/5t )
 su* purposes1 su* regulations %all     
include rules apply+ ! pr9ciples (      
subsections 7a7 & 7d7 ( section #ajia & 
( subsections 7b7 & 7d7 ( section #abcc 
7z 9 effect be=e _! repeal74  7c7       
,def9itions & rules relat+ to /raddles  
,= purposes ( ?is section-- 7#a7        
,/raddle def9$ ,! t]m /raddle means     
(fsett+ positions ) respect to          
applicable prop]ty4  7#b7 ,(fsett+      
positions ,a taxpay] holds (fsett+      
positions ) respect to applicable       
prop]ty if ! taxpay] holds any position 
:i* by itself1 or 9 comb9ation ) #a or m
 o!r positions held by ! taxpay]1 has a 
delta 7)9 ! mean+ ( section             
#dib7;d77#a77 ) respect to any o!r      

position held by ! taxpay] :i* is )9 !  
range beg9n+ ) m9us #j4g & end+ ) m9us  
#a4j4 ,= purposes ( ?is p>agraph1       
positions %all be tak5 into acc\nt :e!r 
or n !y are 9 ! same applicable prop]ty4
  7#c7 ,det]m9ation ( delta ,= purposes 
( ?is section-- 7,a7 ,me?od (           
det]m9ation ,! delta ) respect to any   
position 9 applicable prop]ty ) respect 
to ano!r position 9 applicable prop]ty  
7or any comb9ation ( su* positions7 %all
 be det]m9$ 9 ! same mann] z "u section 
#dib7;d77#b74  7,b7 ,tim+ ( delta       
det]m9ation & o!r special rules ,rules  
simil> to ! rules ( p>agraphs 7#c7 &    
7#d7 ( section #dib7;d7 %all apply =    
purposes ( ?is p>agraph4  7#d7          
,applicable prop]ty & position def9$    
7,a7 ,applicable prop]ty ,! t]m         
applicable prop]ty means any item :i*   
is-- 7i7 describ$ 9 p>agraph 7#a71 7#b71
 7#c71 7#e71 7#f71 7#g71 or 7#h7 (      
section #dic7;a7 7or any item           
sub/antially ! same z any su* item71 &  
7ii7 ( a type :i* is actively trad$4    

7,b7 ,position  7i7 ,9 g5]al ,! t]m     
position means an int]e/ 9 applicable   
prop]ty4  7ii7 ,d]ivatives exclud$ ,su* 
t]m %all n include a d]ivative 7z def9$ 
9 section #dic74  7,c7 ,/ock & debt ^:  
value prim>ily det]m9$ by ref]5ce to o!r
 items ,except z provid$ 9 regulations1 
if ! taxpay] holds an item describ$ 9   
p>agraph 7#a7 or 7#c7 ( section #dic7;a7
 ! value ( :i*1 or ) respect to :i* any 
paym5t or o!r transf]1 is prim>ily      
det]m9$ by ref]5ce to "o or m o!r items 
describ$ 9 p>agraphs 7#a7 ?r\gh 7#h7 (  
section #dic7;a71 !n1 solely = purposes 
( ?is section1 su* item describ$ 9      
p>agraph 7#a7 or 7#c7 ( section #dic7;a7
 %all also be treat$ z if x 7 su* o!r   
item4  7#e7 ,positions held by relat$   
p]sons1 etc  7,a7 ,9 g5]al ,9 det]m9+   
:e!r #b or m positions are (fsett+1 !   
taxpay] %all be treat$ z hold+ any      
position held by a relat$ p>ty 7)9 !    
mean+ ( section #dib7;f774  7,b7 ,c]ta9 
pass-?r\gh entities ,if "p or all ( !   
ga9 or loss ) respect to a position held

 by a p>tn]%ip1 tru/1 or o!r entity w\ld
 prop]ly be tak5 into acc\nt = purposes 
( ?is *apt] by a taxpay]1 !n1 except to 
! ext5t o!rwise provid$ by ! ,secret>y1 
su* position %all be treat$ z held by ! 
taxpay]4  7#f7 ,special rules = =eign   
curr5cy  7,a7 ,position to include      
int]e/ 9 c]ta9 debt ,= purposes (       
p>agraph 7#d77;,b77i71 an obligor's     
int]e/ 9 a nonfunctional curr5cy        
d5om9at$ debt obligation is treat$ z a  
position 9 ! nonfunctional curr5cy4     
7,b7 ,actively trad$ requirem5t ,=      
purposes ( p>agraph 7#d77;,a77ii71 =eign
 curr5cy = :i* !re is an active int]bank
 m>ket is presum$ to be actively trad$4 
7d7 ,exception = h$g+ transactions &    
inve/m5t h$g+ units ,?is section %all n 
apply 9 ! case (-- 7#a7 any h$g+        
transaction 7z def9$ 9 section          
#abba7;b771 &  7#b7 any inve/m5t h$g+   
unit 7z def9$ 9 section #dib74  7e7     
,cross ref]5ce ,= provisions requir+    
capitalization ( c]ta9 int]e/ & c>ry+   
*>ges :]e !re is a /raddle1 see section 

#bfc7;g74  4  7#b7 ,con=m+ am5dm5ts ,!  
la/ s5t5ce ( section #bdf7;c77#d7 is    
am5d$-- 7,a7 by ins]t+ 7z 9 effect be=e 
its repeal7 aft] section #ajib7;c77#d71 
&  7,b7 by ins]t+ 7z s 9 effect7 aft]   
section #ajib7;f74  7c7 ,debt in/rum5ts 
held by insurance companies  7#a7 ,9    
g5]al ,subsection 7a7 ( section #abba is
 am5d$ by /rik+ or at ! end ( p>agraph  
7#g71 by /rik+ ! p]iod at ! end (       
p>agraph 7#h7 & ins]t+ 2 or1 & by add+  
at ! end ! foll[+3  7#i7 any bond1      
deb5ture1 note1 or c]tificate or o!r    
evid5ce ( indebt$ness held by an        
applicable insurance company 7z def9$ 9 
subsection 7b77#e774  4  7#b7           
,applicable insurance company ,section  
#abba7;b71 z am5d$ by ?is ,act1 is am5d$
 by add+ at ! end ! foll[+3  7#e7       
,applicable insurance company ,=        
purposes ( subsection 7a77#i7-- 7,a7 ,9 
g5]al ,! t]m applicable insurance       
company means1 ) respect to any taxable 
ye>1 an insurance company 7z def9$ 9 !  
la/ s5t5ce ( section #haf7;a77-- 7i7 :i*

 is subject to tax "u section #hja7;a7  
or section #hca7;a71  7ii7 ) respect to 
:i* sections #hca7;b71 #hce1 & #hdb d n 
apply1 &  7iii7 :i* is n treat$ z a /ock
 insurance company solely by reason (   
section #hcc7;a77#a74  7,b7 ,p]man5t    
treatm5t by company z ord9>y asset ,if  
an asset is treat$ z an asset describ$ 9
 subsection 7a77#i7 ) respect to any    
applicable insurance company = any      
taxable ye>1 su* asset %all be treat$ z 
s describ$ dur+ any subsequ5t taxable   
ye> su* asset is held by su* company4  4
  7#c7 ,regulations ,p>agraph 7#d7 (    
section #abba7;b7 is am5d$-- 7,a7 by    
/rik+ ,! ,secret>y & ins]t+3  7,a7      
,relat$ p>ties ,! ,secret>y  1 &  7,b7  
by add+ at ! end ! foll[+3  7,b7 ,assets
 ( insurance companies ,! ,secret>y %all
 prescribe su* regulations z may be     
necess>y or appropriate to c>ry out !   
purposes ( subsection 7a77#i71 includ+  
su* regulations z may be necess>y to    
prev5t ! avoidance ( ,f$]al income tax  
?r\gh ! sale or ex*ange ( assets        

describ$ 9 su* subsection4  4  7#d7     
,effective date  7,a7 ,9 g5]al ,!       
am5dm5ts made by ?is subsection %all    
apply to any bond1 deb5ture1 note1 or   
c]tificate or o!r evid5ce ( indebt$ness 
held or acquir$ aft] ! #ij-;day p]iod   
beg9n+ ) ! date ( ! enactm5t ( ?is ,act4
  7,b7 ,transition rule ,if a taxpay]   
has a capital loss c>ryov] to any       
taxable ye> ( ! taxpay] beg9n+ aft] !   
close ( ! #ij-;day p]iod describ$ 9     
subp>agraph 7,a71 ! taxpay] %all1 9     
addition to o!r %ort-t]m capital ga9 ( !
 taxpay] 7if any71 treat z %ort-t]m     
capital ga9 7r ?an z ord9>y income7 an  
am\nt equal to ! less] (-- 7i7 ! net ga9
 7if any7 f sales or ex*anges dur+ su*  
taxable ye> ( assets to :i* section     
#abba7;a77#i7 ( su* ,code 7z add$ by    
p>agraph 7#a77 applies1 or  7ii7 !      
capital loss c>ryov]s to su* taxable ye>
 f taxable ye>s beg9n+ be=e ! close (   
su* p]iod4  7d7 ,r,i,cs all[$ net op]at+
 loss d$uction  7#a7 ,9 g5]al ,p>agraph 
7#b7 ( section #heb7;b7 is am5d$ by     

/rik+ subp>agraph 7,b7 & by r$esignat+  
subp>agraphs 7,c7 ?r\gh 7,g7 z          
subp>agraphs 7,b7 ?r\gh 7,f71           
respectively4  7#b7 ,o!r modifications  
,p>agraph 7#f7 ( section #agb7;d7 is    
am5d$ to read foll[s3  7#f7             
,modifications relat$ to ,r,i,cs &      
,r,e,i,ts ,9 ! case ( any taxable ye> = 
:i* "p ,i or ,,ii ( sub*apt] ,m applies 
to ! taxpay]-- 7,a7 ! net op]at+ loss = 
su* taxable ye> %all be comput$ by tak+ 
into acc\nt-- 7i7 9 ! case ( a regulat$ 
inve/m5t company1 ! adju/m5ts describ$ 9
 section #heb7;b77#b7 7o!r ?an !        
d$uction = divid5ds paid describ$ 9     
subp>agraph 7,c7 !re(771 &  7ii7 9 !    
case ( a real e/ate inve/m5t tru/1 !    
adju/m5ts describ$ 9 section            
#heg7;b77#b7 7o!r ?an ! d$uction =      
divid5ds paid describ$ 9 subp>agraph    
7,b7 !re(71  7,b7 :]e su* taxable ye> is
 a prior taxable ye> ref]r$ to 9        
p>agraph 7#b7 ( subsection 7b71 ref]5ces
 9 su* p>agraph to taxable income %all  
be treat$ z ref]5ces to-- 7i7 9 ! case (

 a regulat$ inve/m5t company1 regulat$  
inve/m5t company taxable income 7z def9$
 9 section #heb7;b77#b771 &  7ii7 9 !   
case ( a real e/ate inve/m5t tru/1 real 
e/ate inve/m5t taxable income 7z def9$ 9
 section #heg7;b77#b771 &  7,c7         
subsection 7a77#b7 %all be appli$ by    
treat+ ref]5ces to taxable income z     
ref]5ces to-- 7i7 9 ! case ( a regulat$ 
inve/m5t company1 regulat$ inve/m5t     
company taxable income 7z def9$ 9       
section #heb7;b77#b77 b )\t reg>d to !  
d$uction = divid5ds paid 7z def9$ 9     
section #efa71 &  7ii7 9 ! case ( a real
 e/ate inve/m5t tru/1 real e/ate        
inve/m5t taxable income 7z def9$ 9      
section #heg7;b77#b77 b )\t reg>d to !  
d$uction = divid5ds paid 7z def9$ 9     
section #efa74  4  7#c7 ,con=m+ am5dm5ts
  7,a7 ,section #ddc7;e77#c7 is am5d$ by
 /rik+ section #heb7;b77#b77;,d7 &      
ins]t+ section #heb7;b77#b77;,c74  7,b7 
,section #heb7;a77#a77;,a7 is am5d$ by  
/rik+ subsection 7b77#b77;,d7 & ins]t+  
subsection 7b77#b77;,c74  7,c7 ,section 

#dihb7;e77#a77;,a7 is am5d$ by /rik+ &  
7,d7 & ins]t+ & 7,c74  7#d7 ,effective  
date ,! am5dm5ts made by ?is subsection 
%all apply to net op]at+ losses =       
taxable ye>s end+ aft] ! #ij? day aft] !
 date ( ! enactm5t ( ?is ,act4  7e7     
,nonrecognition ( ga9 or loss f         
transactions by a corporation ) respect 
to its /ock  7#a7 ,9 g5]al ,section     
#ajcb is am5d$ to read z foll[s3  #ajcb4
 ,transactions by a corporation )       
respect to its /ock  7a7 ,nonrecognition
 on ex*ange ( /ock = prop]ty ,no ga9 or 
loss %all be recogniz$ to a corporation 
on ! receipt ( money or o!r prop]ty 9   
ex*ange = /ock ( su* corporation4  7b7  
,d]ivative transactions by a corporation
 ) respect to its /ock  7#a7 ,9 g5]al   
,except z o!rwise provid$ 9 ?is         
subsection1 section #ajcb d]ivative     
items ( a corporation %all n be tak5    
into acc\nt 9 det]m9+ su* corporation's 
liability = tax "u ?is subtitle4  7#b7  
,income recognition on c]ta9 =w>d       
contracts  7,a7 ,9 g5]al ,if-- 7i7 a    

corporation acquires its /ock1 &  7ii7  
su* acquisition is "p ( a plan 7or s]ies
 ( relat$ transactions7 pursuant to :i* 
! corporation ent]s into a =w>d contract
 ) respect to its /ock1  su* corporation
 %all include am\nts 9 income z if !    
excess ( ! am\nt to be receiv$ "u ! =w>d
 contract ov] ! fair m>ket value ( !    
/ock z ( ! date ! corporation ent]$ into
 ! =w>d contract 7 orig9al issue disc\nt
 on a debt in/rum5t acquir$ on su* date4
 ,! prec$+ s5t5ce %all apply only to !  
ext5t t ! am\nt ( /ock involv$ 9 ! =w>d 
contract does n exce$ ! am\nt acquir$ z 
describ$ 9 clause 7i74  7,b7 ,plan      
presum$ to exi/ ,if a corporation ent]s 
into a =w>d contract ) respect to its   
/ock )9 ! #fj-;day p]iod beg9n+ on !    
date :i* is #cj days be=e ! date t !    
corporation acquires its /ock1 su*      
acquisition %all be treat$ z pursuant to
 a plan describ$ 9 subp>agraph 7,a77ii7 
unless x is e/abli%$ t ent]+ into su*   
contract & su* acquisition are n        
pursuant to a plan or s]ies ( relat$    

transactions4  7c7 ,section #ajcb       
d]ivative items ,= purposes ( ?is       
section1 ! t]m section #ajcb d]ivative  
item means1 ) respect to any            
corporation1 any item ( income1 ga91    
loss1 or d$uction if-- 7#a7 su* item    
arises out ( ! rights or obligations "u 
any d]ivative 7z def9$ 9 section #dic7  
to ! ext5t su* d]ivative relates to !   
corporation's /ock 7or is attributable  
to any transf] or ext+ui%m5t ( any su*  
"r or obligation71 or  7#b7 su* item    
arises "u any o!r contract or position b
 only to ! ext5t t su* item reflects 7or
 is det]m9$ by ref]5ce to7 *anges 9 !   
value ( su* /ock or di/ributions !reon4 
,su* t]m %all n include any d$uction )  
respect to :i* section #hc7;h7 applies &
 %all n include any d$uction = any item 
:i* is 9 ! nature ( comp5sation =       
s]vices r5d]$4 ,= purposes ( ?is        
subp>agraph1 de m9imis relation%ips1 z  
det]m9$ by ! ,secret>y1 %all be         
disreg>d$4  7d7 ,coord9ation ) d]ivative
 & /raddle rules ,9 ! case ( a d]ivative

 or o!r contract or position describ$ 9 
subsection 7c7 :i* is held by a         
corporation ) respect to its /ock-- 7#a7
 ?is section 7r ?an "p ,,iv ( sub*apt]  
,e or section #ajib7 %all apply 9       
det]m9+ ! treatm5t ( section #ajcb      
d]ivative items "u ?is subtitle1 &  7#b7
 su* d]ivative or o!r contract or       
position %all n be tak5 into acc\nt 9   
det]m9+ :e!r ! corporation has an       
inve/m5t h$g+ unit1 applicable prop]ty  
int]e/1 or /raddle ) respect to its /ock
 = purposes ( su* "p or section4  7e7   
,regulations ,! ,secret>y %all prescribe
 su* regulations or o!r guidance z may  
be appropriate to c>ry out ! purposes ( 
?is section1 includ+ regulations or o!r 
guidance :i* treat ! portion ( an       
in/rum5t :i* is describ$ 9 subsection   
7c77#a7 sep>ately f ! portion ( su*     
in/rum5t :i* is n s describ$4  7f7      
,basis ,= basis ( prop]ty acquir$ by a  
corporation 9 c]ta9 ex*anges = its /ock1
 see section #cfb4  4  7#b7 ,cl]ical    
am5dm5t ,! item relat+ to section #ajcb 

9 ! table ( sections = "p ,,iii (       
sub*apt] ,o ( *apt] #a is am5d$ to read 
z foll[s3  ,sec4 #ajcb4 ,transactions by
 a corporation ) respect to its /ock4  4
  7#c7 ,effective date ,! am5dm5ts made 
by ?is subsection %all apply to         
transactions ent]$ into aft] ! date ( ! 
enactm5t ( ?is ,act4  #d4 ,te*nical &   
con=m+ am5dm5ts  7a7 ,repeal ( c]ta9 o!r
 sup]c$$ rules = det]m9+ capital ga9s & 
losses  7#a7 ,9 g5]al ,"p ,,iv (        
sub*apt] ,p ( *apt] #a is am5d$ by /rik+
 sections #abcc1 #abcd1 #abcd;,a1       
#abcd;,b1 #abcf1 #abef1 #abeh1 #abei1 & 
#abfj 7& by /rik+ ! items relat+ to su* 
sections 9 ! table ( sections = su* "p74
  7#b7 ,con=m+ am5dm5ts relat$ to repeal
 ( section #abcd ,section #fjde7;h77#b7 
is am5d$-- 7,a7 by /rik+ 7z def9$ 9     
section #abcd7;b77#b77;,a771 &  7,b7 by 
add+ at ! end ! foll[+3 ,= purposes ( ! 
prec$+ s5t5ce1 ! t]m clos+ transaction  
means any t]m9ation ( ! taxpay]'s       
obligation "u an option 9 prop]ty o!r   
?an ?r\gh ! ex]cise or lapse ( !        

option44  7#c7 ,con=m+ am5dm5ts relat$  
to repeal ( section #abcf  7,a7 ,section
 #dge7;d77#c77;,a7 is am5d$ by /rik+ or 
section #abcf7;b74  7,b7 ,section       
#eab7;b77#e7 is am5d$ by /rik+ section  
#abcf7;c7 & ins]t+ section #ajeh7;c74   
7,c7 ,section #ajeh is am5d$-- 7i7 by   
/rik+ 7z def9$ 9 section #abcf7;c77 9   
subsection 7a71 &  7ii7 by r$esignat+   
subsection 7c7 z subsection 7d7 & by    
ins]t+ aft] subsection 7b7 ! foll[+ new 
subsection3  7c7 ,securities ,= purposes
 ( ?is section1 ! t]m security means any
 %>e ( /ock 9 any corporation1          
c]tificate ( /ock or int]e/ 9 any       
corporation1 note1 bond1 deb5ture1 or   
evid5ce ( indebt$ness1 or any evid5ce ( 
an int]e/ 9 or "r to subscribe to or    
pur*ase any ( ! =ego+4  4  7#d7 ,con=m+ 
am5dm5ts relat$ to repeal ( section     
#abef  7,a7 ,section #dfa7;i77#c77;,b7  
is am5d$ to read z foll[s3  7,b7 any    
p>tn]%ip or o!r entity 7o!r ?an a       
corporation :i* is n an ,s corporation7 
if m ?an #ce p]c5t ( ! losses ( su*     

entity dur+ ! taxable ye> are allocable 
to limit$ p>tn]s or limit$ entrepr5eurs 
7)9 ! mean+ ( subsection 7k77#d771 &  4 
7,b7 ,section #dge7;d77#a7 is am5d$ by  
/rik+ sections #bfc7;g71 #bfc;,a1 &     
#abef7;a7 & ins]t+ sections #bfc7;g7 &  
#bfc;,a4  7,c7 ,section #ihh7;c77#a7 is 
am5d$ by /rik+ subp>agraphs 7,d7 & 7,e74
  7,d7 ,section #abab is am5d$ by /rik+ 
subsection 7c74  7,e7 ,section #abbc is 
am5d$ by /rik+ p>agraphs 7#g7 & 7#ad74  
7,f7 ,section #abha7;b77#a77;,e7 is     
am5d$ to read z foll[s3  7,e7 is "p ( a 
h$g+ transaction 7z def9$ 9 section     
#abba7;b77 or an inve/m5t h$g+ unit 7z  
def9$ 9 section #dib71 or  4  7,g7      
,section #adjb is am5d$ by /rik+        
subsection 7i74  7,h7 ,section          
#dihb7;e77#f77;,b7 is am5d$ by /rik+    
sections #abef & #abif & ins]t+ sections
 #dia & #abif4  7#e7 ,con=m+ am5dm5ts   
relat$ to repeal ( section #abei        
,section #dge7;f77#a7 is am5d$ by /rik+ 
subp>agraph 7,c7 & by r$esignat+        
subp>agraph 7,d7 z subp>agraph 7,c74    

7b7 ,o!r con=m+ am5dm5ts  7#a7 ,section 
#cee7;g77#b77;,b77i77,v7 is am5d$ to    
read z foll[s3  7,v7 any d]ivative 7z   
def9$ 9 section #dic71  4  7#b7 ,section
 #hef7n77#d7 is am5d$ by ins]t+ or      
d]ivatives 7z def9$ 9 section #dic7 aft]
 securities 7z def9$ 9 section          
#dge7;c77#b774  7#c7 ,section           
#heg7;e77#b77;,c77i7 is am5d$ by /rik+  
section #hfj;,e or #abgb & ins]t+       
section #dia1 #hfj;,e1 or #abgb4  7#d7  
,section #ihh7;d77#a7 is am5d$-- 7,a7 by
 /rik+ or #abef & ins]t+ or #dia1 &     
7,b7 by /rik+ #ajib1 & #abef & ins]t+   
#dia1 & #ajib4  7#e7 ,section #ajia7;e7 
is am5d$ to read z foll[s3  7e7         
,coord9ation ) m>k to m>ket ( d]ivatives
 & und]ly+ inve/m5ts ,= purposes ( ?is  
section1 ! t]m /ock or securities %all n
 include-- 7#a7 any d]ivative 7z def9$ 9
 section #dic71 or  7#b7 any und]ly+    
inve/m5t 7z def9$ 9 section             
#dib7;e77#a77 :i*1 at ! "t ( ! sale or  
o!r disposition1 is "p ( an inve/m5t    
h$g+ unit 7z def9$ 9 section #dib74  4  

7#f7 7,a7 ,section #abba7;a77#f7 is     
am5d$ to read z foll[s3  7#f7 any-- 7,a7
 d]ivative 7z def9$ 9 section #dic71 or 
7,b7 any und]ly+ inve/m5t 7z def9$ 9    
section #dib7;e77#a77 :i* is "p ( an    
inve/m5t h$g+ unit 7z def9$ 9 section   
#dib71  4  7,b7 ,section #abba7;b7 is   
am5d$ by /rik+ p>agraph 7#a74  7#g7     
,section #dige7;f77#aa77;,d7 is am5d$ by
 /rik+ clauses 7i7 & 7ii7 & ins]t+ !    
foll[+3  7i7 ,security ,! t]m security  
means any security describ$ 9 section   
#dge7;c77#b7 7)\t reg>d to subp>agraph  
7,d77iii7 !re(7 & any d]ivative )       
respect to su* a security 7)9 ! mean+ ( 
section #dic74  7ii7 ,commodity ,! t]m  
commodity means any commodity describ$ 9
 section #dge7;e77#b7 7)\t reg>d to     
subp>agraph 7,b77iii7 !re(7 & any       
d]ivative ) respect to su* a commodity  
7)9 ! mean+ ( section #dic74  4  7#h7 ,!
 table ( p>ts = sub*apt] ,e ( *apt] #a  
is am5d$ by add+ at ! end ! foll[+ new  
item3  ,"p ,,iv4 ,tax treatm5t (        
d]ivatives & simil> contracts  4  #e4   

,effective dates  7a7 ,9 g5]al ,except z
 provid$ 9 ?is ,act-- 7#a7 ! am5dm5ts   
made by section #b %all apply to taxable
 ev5ts occurr+ aft] ! #ij-;day p]iod    
beg9n+ ) ! date ( ! enactm5t ( ?is ,act1
 9 taxable ye>s end+ aft] ! la/ day (   
su* p]iod1 &  7#b7 ! am5dm5ts made by   
sections #c & #d %all apply to          
d]ivatives & und]ly+ inve/m5ts held aft]
 ! la/ day ( su* p]iod4  7b7            
,id5tification requirem5ts ,if1 z ( !   
close ( ! #ij-;day p]iod describ$ 9     
subsection 7a77#a71 a taxpay]           
simultane\sly holds #a or m d]ivatives )
 respect to an und]ly+ inve/m5t & !     
und]ly+ inve/m5t-- 7#a7 ! taxpay] %all  
make ! id5tifications requir$ "u section
 #dib7;c77#b7 ( ,int]nal ,rev5ue ,code (
 #aihf 7z add$ by section #b ( ?is ,act7
 be=e ! close ( su* p]iod1 &  7#b7 if   
su* id5tifications result 9 an inve/m5t 
h$g+ unit1 ! fir/ applicable h$g+ p]iod 
) respect to su* unit %all beg9 on ! day
 aft] ! close ( su* p]iod4  7c7         
,def9itions ,= purposes ( ?is section1  

any t]m us$ 9 ?is section :i* is also   
us$ 9 "p ,,iv ( sub*apt] ,e ( *apt] #a (
 su* ,code 7z s add$7 %all h ! same     
mean+ z :5 us$ 9 su* "p4