The IRS and Treasury Department issued regulations under Section 1092 today, relating to debt that is a position in personal property that is part of a straddle.  A debt or obligation generally is not considered property of the debtor or obligor for Section 1092 purposes, and hence cannot be part of a straddle.  The regulations provide that if a taxpayer is the obligor under a debt instrument on which one or more payments are linked to the value of personal property or a position with respect to personal property, then the taxpayer’s obligation under the debt instrument is a position with respect to personal property and may be part of a straddle.  The regulations finalize temporary regulations issued in September 2013.

The regulations can be accessed here.