Technical and conforming amendments

(a) Repeal of certain other superceded rules for determining capital gains and losses (1) In general Part IV of subchapter P of chapter 1 is amended by striking sections 1233, 1234, 1234A, 1234B, 1236, 1256, 1258, 1259, and 1260 (and by striking the items relating to such sections in the table of sections for such part). (2) Conforming amendments related to repeal of section 1234 Section 6045(h)(2) is amended— (A) by striking (as defined in section 1234(b)(2)(A)), and (B) by adding at the end the following: For purposes of the preceding sentence, the term closing transaction means any termination of the taxpayer’s obligation under an option in property other than through the exercise or lapse of the option.. (3) Conforming amendments related to repeal of section 1236 (A) Section 475(d)(3)(A) is amended by striking or section 1236(b). (B) Section 512(b)(5) is amended by striking section 1236(c) and inserting section 1058(c). (C) Section 1058 is amended— (i) by striking (as defined in section 1236(c)) in subsection (a), and (ii) by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection: (c) Securities 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.. (4) Conforming amendments related to repeal of section 1256 (A) Section 461(i)(3)(B) is amended to read as follows: (B) any partnership or other entity (other than a corporation which is not an S corporation) if more than 35 percent of the losses of such entity during the taxable year are allocable to limited partners or limited entrepreneurs (within the meaning of subsection (k)(4)), and. (B) Section 475(d)(1) is amended by striking sections 263(g), 263A, and 1256(a) and inserting sections 263(g) and 263A. (C) Section 988(c)(1) is amended by striking subparagraphs (D) and (E). (D) Section 1212 is amended by striking subsection (c). (E) Section 1223 is amended by striking paragraphs (7) and (14). (F) Section 1281(b)(1)(E) is amended to read as follows: (E) is part of a hedging transaction (as defined in section 1221(b)) or an investment hedging unit (as defined in section 492), or. (G) Section 1402 is amended by striking subsection (i). (H) Section 4982(e)(6)(B) is amended by striking sections 1256 and 1296 and inserting sections 491 and 1296. (5) Conforming amendments related to repeal of section 1259 Section 475(f)(1) is amended by striking subparagraph (C) and by redesignating subparagraph (D) as subparagraph (C). (b) Other conforming amendments (1) Section 355(g)(2)(B)(i)(V) is amended to read as follows: (V) any derivative (as defined in section 493),. (2) Section 856(n)(4) is amended by inserting or derivatives (as defined in section 493) after securities (as defined in section 475(c)(2)). (3) Section 857(e)(2)(C)(i) is amended by striking section 860E or 1272 and inserting section 491, 860E, or 1272. (4) Section 988(d)(1) is amended— (A) by striking or 1256 and inserting or 491, and (B) by striking 1092, and 1256 and inserting 491, and 1092. (5) Section 1091(e) is amended to read as follows: (e) Coordination with mark to market of derivatives and underlying investments For purposes of this section, the term stock or securities shall not include— (1) any derivative (as defined in section 493), or (2) any underlying investment (as defined in section 492(e)(1)) which, at the time of the sale or other disposition, is part of an investment hedging unit (as defined in section 492).. (6) (A) Section 1221(a)(6) is amended to read as follows: (6) any— (A) derivative (as defined in section 493), or (B) any underlying investment (as defined in section 492(e)(1)) which is part of an investment hedging unit (as defined in section 492),. (B) Section 1221(b) is amended by striking paragraph (1). (7) Section 4975(f)(11)(D) is amended by striking clauses (i) and (ii) and inserting the following: (i) Security The term security means any security described in section 475(c)(2) (without regard to subparagraph (D)(iii) thereof) and any derivative with respect to such a security (within the meaning of section 493). (ii) Commodity The term commodity means any commodity described in section 475(e)(2) (without regard to subparagraph (B)(iii) thereof) and any derivative with respect to such a commodity (within the meaning of section 493).. (8) The table of parts for subchapter E of chapter 1 is amended by adding at the end the following new item: Part IV. Tax treatment of derivatives and similar contracts.