Verification
(4) Verification. A taxpayer that has made an election under 1.988-3(b)(3) must attach to his income tax return a statement which sets forth the following: (i) A description and the date of each election made by the taxpayer during the taxpayer's taxable year; (ii) A statement that each election made during the taxable year was made before the close of the date the transaction was entered into; (iii) A description of any contract for which an election was in effect and the date such contract expired or was otherwise sold or exchanged during the taxable year; (iv) A statement that the contract was never part of a straddle as defined in section 1092; and (v) A statement that all transactions subject to the election are included on the statement attached to the taxpayer's income tax return. (5) Independent verification(i) Effect of independent verification. If the taxpayer receives independent verification of the election in paragraph (b)(3) of this section, the taxpayer shall be presumed to have satisfied the requirements of paragraphs (b)(3) and (4) of this section. A contract that is a part of a straddle as defined in section 1092 may not be independently verified and shall be subject to the rules of paragraph (b)(2) of this section. (ii) Requirements for independent verification. A taxpayer receives independent verification of the election in paragraph (b)(3) of this section if (A) The taxpayer establishes a separate account(s) with an unrelated broker(s) or dealer(s) through which all transactions to be independently verified pursuant to this paragraph (b)(5) are conducted and reported. (B) Only transactions entered into on or after the date the taxpayer establishes such account may be recorded in the account. (C) Transactions subject to the election of paragraph (b)(3) of this section are entered into such account on the date such transactions are entered into. (D) The broker or dealer provides the taxpayer a statement detailing the transactions conducted through such account and includes on such statement the following: Each transaction identified in this account is subject to the election set forth in section 988(a)(1)(B). (iii) Special effective date for independent verification. The rules of this paragraph (b)(5) shall be effective for transactions entered into after March 17, 1992. (6) Effective date. Except as otherwise provided, this paragraph (b) is effective for taxable years beginning on or after September 21, 1989. For prior taxable years, any reasonable contemporaneous election meeting the requirements of section 988(a)(1)(B) shall satisfy this paragraph (b).