Wright v. Commissioner

OPINION

ROGERS, Circuit Judge.

Section 1256 of the Internal Revenue Code provides that an investor who holds certain types of derivatives at the close of the taxable year must “mark to market” those derivatives by treating them as having been sold for their fair market value on the last business day of the taxable year. A “foreign currency contract” is a “section 1256 contract” that an investor must mark to market at the end of the taxable year. I.R.C. § 1256(b)(1). Contending that a foreign currency option is within the definition of a “foreign currency contract” under § 1256, Cheryl and Terry…