26 C.F.R. § 1.475(b)-4 Exemptions—transitional issues.
Title 26 - Internal Revenue
(a) Transitional identification—(1) Certain securities previously identified under section 1236. If, as of the close of the last taxable year ending before December 31, 1993, a security was identified under section 1236 as a security held for investment, the security is treated as being identified as held for investment for purposes of section 475(b). (2) Consistency requirement for other securities. In the case of a security (including a security described in section 475(c)(2)(F)) that is not described in paragraph (a)(1) of this section and that was held by the taxpayer as of the close of the last taxable year ending before December 31, 1993, the security is treated as having been properly identified under section 475(b)(2) or 475(c)(2)(F)(iii) if the information contained in the dealer's books and records as of the close of that year supports the identification. If there is any ambiguity in those records, the taxpayer must, no later than January 31, 1994, place in its records a statement resolving this ambiguity and indicating unambiguously which securities are to be treated as properly identified. Any information that supports treating a security as having been properly identified under section 475(b)(2) or (c)(2)(F)(iii) must be applied consistently from one security to another. (b) Corrections on or before January 31, 1994—(1) Purpose. This paragraph (b) allows a taxpayer to add or remove certain identifications covered by §1.475(b)–1. (2) To conform to §1.475(b)–1(a)—(i) Added identifications. To the extent permitted by paragraph (b)(2)(ii) of this section, a taxpayer may identify as being described in section 475(b)(1) (A) or (B)— (A) A security that was held for immediate sale but was not held primarily for sale to customers in the ordinary course of the taxpayer's trade or business (for example, a trading security); or (B) An evidence of indebtedness that was not held for sale to customers in the ordinary course of the taxpayer's trade or business and that the taxpayer intended to hold for less than one year. (ii) Limitations. An identification described in paragraph (b)(2)(i) of this section is permitted only if— (A) Prior to December 28, 1993, the taxpayer did not identify as being described in section 475(b)(1) (A) or (B) any of the securities described in paragraph (b)(2)(i) of this section; (B) The taxpayer identifies every security described in paragraph (b)(2)(i) of this section for which a timely identification of the security under section 475(b)(2) cannot be made after the date on which the taxpayer makes these added identifications; and (C) The identification is made on or before January 31, 1994. (3) To conform to §1.475(b)–1(c). On or before January 31, 1994, a taxpayer described in §1.475(b)–1(e)(2)(i)(B) may remove an identification under section 475(b)(1)(A) of a security described in §1.475(b)–1(e)(2)(i)(A). (c) Effect of corrections. An identification added under paragraph (a)(2) or (b)(2) of this section is timely for purposes of section 475(b)(2) or (c)(2)(F)(iii). An identification removed under paragraph (a)(2) or (b)(3) of this section does not subject the taxpayer to the provisions of section 475(d)(2). [T.D. 8700, 61 FR 67722, Dec. 24, 1996]
Title 26: Internal Revenue
PART 1—INCOME TAXES
inventories
§ 1.475(b)-4 Exemptions—transitional issues.
