(A)The term “transaction” means any transaction described in subparagraph (B) if the amount which the taxpayer is entitled to receive (or is required to pay) by reason of such transaction— (i)is denominated in terms of a nonfunctional currency, or (ii)is determined by reference to the value of 1 or more nonfunctional currencies. (B)For purposes of subparagraph (A), the following transactions are described in this subparagraph: (i)The acquisition of a debt instrument or becoming the obligor under a debt instrument. (ii)Accruing (or otherwise taking into account) for purposes of this subtitle any item of expense or gross income or receipts which is to be paid or received after the date on which so accrued or taken into account. (iii)Entering into or acquiring any forward contract, futures contract, option, or similar financial instrument. (C) (i)In the case of any disposition of any nonfunctional currency— (I)such disposition shall be treated as atransaction, and (II)any gain or loss from such transaction shall be treated as foreign currency gain or loss (as the case may be).


26 USC § 988(c)(1)(A)

Scoping language

For purposes of this section
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