Investor Glossary-section 1259Investor Glossary-section 1259Investor Glossary-section 1259Investor Glossary-section 1259Insightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Section 1259

The HTML to link to this page
 

Section 1259 is a portion of the federal tax code covering several types of transactions that are to be treated as sales subject to capital gains taxes (i.e. constructive sale rule). Under section 1259, a transaction is defined as a constructive sale if it offsets an investment in an owned position. For instance, investors who sell short a stock they already hold long, or buy futures on an asset already held, have made a constructive sale according to section 1259. However, there are a few exceptions to section 1259. For example, investors who hold the original position for 60 days after they close the offsetting position are exempt from section 1259. Another exception include investors who realize a gain from an offsetting position are also exempt from section 1259 if they close the position within the first 30 days of January following the year the gain was achieved. Congress enacted section 1259 in 1997 to prevent investors from avoiding the capital gain tax, and to limit the transfer of gains to future tax periods.



Rate this Section 1259 definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: liquidity ratio, annual return, wholly-owned subsidiary, debt service coverage, margin rate, 1031 exchange, covered put, inflation, EBITDA, irrevocable trust, deferred tax, open position, 1035 exchange, ex-dividend date, stock split, labor relations, cancelled check, required rate of return, stock market close, limit order, real GDP, APR, in escrow, quality assurance, FTSE, LIBOR, per diem, FICO score, current ratio, Zero Cost Collar, average price per share, class C shares, deferred revenue, VIX, retained earnings, implied volatility, ex-dividend, dividends payable, option premium, balance sheet, command economy, minority interest, Key Rate Duration, diluted share, phantom income, risk management, 144a, reverse mortgage, 401a


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use