Legal Dictionary of Pakistan

tax-straddle rule

The rule that a taxpayer may not defer a tax liability by investing a short-term capital gain in a commodities future or option (i.e., investment vehicles whose values formerly did not have to be reported at the end of the year) to create the appearance of a loss in the current tax year. ( This practice has been greatly restricted by the requirement that gains and losses on commodities transactions must be reported based on their value at year end. IRC (26 USCA) § 165(c)(2).