30.8 Constructive Sales of Appreciated Financial Positions
One aspect of a constructive sale of an appreciated financial position was discussed in 30.5, dealing with short sales. The constructive sale rules apply not only to short sales of stock but also to other transactions such as an appreciated financial position in a partnership interest or certain debt obligations.
You have made a constructive sale of an appreciated financial position if you:
You are also treated as having made a constructive sale of an appreciated financial position if a person related to you enters into any of the above transactions.
A contract for sale of any stock, debt instrument, or partnership interest that is not a marketable security is not a constructive sale if it settles within one year of the date you enter into it.
Tax treatment.
If you are considered to have transacted a constructive sale, you must report as taxable income gain on the financial position as if the position was sold at its fair market value on the ...
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