[Code of Federal Regulations] [Title 26, Volume 11] [Revised as of April 1, 2002] From the U.S. Government Printing Office via GPO Access [CITE: 26CFR1.1256(e)-1] [Page 501] TITLE 26--INTERNAL REVENUE CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY (CONTINUED) GAIN OR LOSS ON DISPOSITION OF PROPERTY--Table of Contents Sec. 1.1256(e)-1 Identification of hedging transactions. (a) Identification and recordkeeping requirements. Under section 1256(e)(2), a taxpayer that enters into a hedging transaction must identify the transaction as a hedging transaction before the close of the day on which the taxpayer enters into the transaction. (b) Requirements for identification. The identification of a hedging transaction for purposes of section 1256(e)(2) must satisfy the requirements of Sec. 1.1221-2(f)(1). Solely for purposes of section 1256(f)(1), however, an identification that does not satisfy all of the requirements of Sec. 1.1221-2(f)(1) is nevertheless treated as an identification under section 1256(e)(2). (c) Consistency with Sec. 1.1221-2. Any identification for purposes of Sec. 1.1221-2(f)(1) is also an identification for purposes of this section. If a taxpayer satisfies the requirements of Sec. 1.1221- 2(g)(1)(ii), the transaction is treated as if it were not identified as a hedging transaction for purposes of section 1256(e)(2). (d) Effective date. The rules of this section apply to transactions entered into on or after March 20, 2002. [T.D. 8985, 67 FR 12870, Mar. 20, 2002]