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Conversion transaction

(Tax Law)

Any transaction that you entered into after April 30, 1993, that meets both of these tests.

  1. Substantially all of your expected return from the transaction is due to the time value of your net investment.
  2. The transaction is one of the following.
    1. A straddle, including any set of offsetting positions on stock.
    2. Any transaction in which you acquire property (whether or not actively traded) at substantially the same time that you contract to sell the same property or substantially identical property at a price set in the contract.
    3. Any other transaction that is marketed or sold as producing capital gains from a transaction described in (1).

Source : Internal Revenue Service - United States Department of Treasury

Language : English

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