In Pilgrim’s Pride Corporation v. Commissioner, the US Court of Appeals for the Fifth Circuit today overturned the Tax Court, holding that the abandonment of securities is an ordinary loss.  In a case of first impression, the Tax Court had held that Section 1234A(1) applies to an abandonment loss and requires that it be classified as capital.  The Fifth Circuit reversed, holding that Section 1234A(1) only applies to the termination of contractual or derivative rights, and not to the abandonment of capital assets.