(b) Presumption That Transaction Entered Into for Profit. -- For purposes of subsection (a), any position held by a commodities dealer or any person regularly engaged in investing in regulated futures contracts shall be rebuttably presumed to be part of a transaction entered into for profit.

Section 1808(d) of the Tax Reform Act of 1986 made technical corrections to section 108, in part, as follows:

(d) Section 108. -- Section 108 of the Tax Reform Act of 1984 is amended --

(1) by striking out "if such position is part of a transaction entered into for profit" and inserting in lieu thereof "if such loss is 1986 U.S. Tax Ct. LEXIS 16">*27 incurred in a trade or business, or if such loss is incurred in a transaction entered into for profit though not connected with a trade or business,"

(2) by striking out subsection (b) and inserting in lieu thereof the following:

"(b) Loss Incurred in a Trade or Business. -- For purposes of subsection (a), any loss incurred by a commodities dealer in the trading of commodities shall be treated as a loss incurred in a trade or business."

Respondent's remaining arguments against petitioner's motion for summary judgment are that, (1) petitioner must establish at trial that he regularly traded in gold in order for the provisions of section 108(b) to apply, and (2) even if petitioner was a dealer in gold, he would only be rebuttably presumed to have incurred the losses in a transaction entered into for profit, and at trial, it must be determined whether such a profit motive actually existed. Respondent has conceded that petitioner was a dealer in commodities within the meaning of section 108(f). We believe that the technical corrections to section 108 make it clear that these arguments are not valid defenses to petitioner's motion for summary judgment.

The amendments to section 1081986 U.S. Tax Ct. LEXIS 16">*28 now provide that any loss incurred by a commodities dealer in the trading of commodities is deductible without regard to the existence of a profit motive. ⁴ This is a per se rule and no longer a rebuttable 87 T.C. 1213">*1219 presumption. As respondent has conceded that petitioner is a commodities dealer, the provisions of section 108 have been satisfied. ⁵

Respondent nevertheless argues that petitioner must establish that the transactions in question were part of his regular trading activities in order for the provisions of section 108(b) to be applicable. 1986 U.S. Tax Ct. LEXIS 16">*29 See sec. 1.165-13T, Q & A-6, Temporary Income Tax Regs., 49 Fed. Reg. 33445 (Aug. 23, 1984). ⁶ The Conference Committee statement of managers, ⁷ however, states with respect to the amendments to section 108(b) that,

If a person qualifies as a commodities dealer, the subsection (b) treatment applies with respect to any position disposed of by such person. It would, for example, apply without regard to whether the position was in a commodity regularly traded by the person, whether it was traded on an exchange on which the dealer was a member, or whether an identical position was re-established on the same trading day or subsequently. * * * [Conf. Rept. 99-841, at II-845.]

1986 U.S. Tax Ct. LEXIS 16">*30 The Conference report makes clear that the applicability of subsection (b) treatment does not turn on whether the transactions in question were part of petitioner's regular trading activities. Therefore, section 108(b) is applicable to the transactions in question and petitioner's loss on his straddle transactions in 1980 is allowable.

Petitioner has fully supported his claim that no genuine issue for trial exists with respect to his 1980 straddle losses. Respondent has failed to allege any specific facts which would constitute genuine issues for trial. Accordingly, petitioner's motion for summary judgment will be granted with respect to this issue. ⁸

In satisfaction of 100 long gold futures contracts that called for delivery in December 1978, petitioner received 87 T.C. 1213">*1220 warehouse receipts representing 10,000 ounces of gold on December 1, 1978. Petitioner paid a $ 1,929,165.17 delivery price on December 4, 1978.

From October 4, 1978, through May 5, 1980, petitioner established and disposed of straddle positions in gold futures contracts as shown in Appendix B. Throughout the period from December 1, 1978, through May 1, 1980, petitioner continually bought and sold gold futures contracts but generally maintained a balanced position taking into account the delivered gold commodity.

Petitioner's position on May 1, 1980, was short 100 May 1980 gold futures contracts and long the delivered gold. On May 2, 1980, petitioner delivered the warehouse receipts to the Chicago Mercantile Exchange Clearing House in satisfaction of the petitioner's delivery obligations under the 100 short May 1980 gold contracts acquired on May 1, 1980. This delivery closed out his positions in the gold contracts. On petitioner's 1980 Federal income tax return he reported a $ 3,244,712 long-term capital gain from the May1986 U.S. Tax Ct. LEXIS 16">*32 2, 1980, delivery of the gold bars to close the May 1, 1980, short position.

Respondent determined in his notice of deficiency that this gain should be treated as short-term capital gain pursuant to section 1233(b). ⁹ Respondent maintains this position and objects to petitioner's motion for summary judgment as it relates to this issue.

Section 1233(b) provides, in relevant part:

SEC. 1233(b). Short-Term Gains and Holding Periods. -- If gain or loss from a short sale is considered as gain or loss from the sale or exchange of a capital asset under subsection (a) and if on the date of such short sale substantially identical property has been held by the taxpayer for not more than 1 year (determined without regard to the effect, under paragraph (2) of this subsection, of such short sale on the holding period), or if substantially identical property is acquired by the taxpayer after1986 U.S. Tax Ct. LEXIS 16">*33 such short sale and on or before the date of the closing thereof --

(1) any gain on the closing of such short sale shall be considered as a gain on the sale or exchange of a capital asset held for not more than 1 year (notwithstanding the period of time any property used to close such short sale has been held); * * *

Petitioner asserts that the provisions of section 1233 are not applicable to this transaction because physical commodities, such as were used to close the short sale in this case, are not within the scope of the section. Section 1233(e)(2)(A) provides:

SEC. 1233 (e). Rules For Application of Section. --

* * * *

(2) For purposes of subsections (b) and (d) --

(A) the term "property" includes only stocks and securities (including stocks and securities dealt with on a "when issued" basis), and commodity futures, which are capital assets in the hands1986 U.S. Tax Ct. LEXIS 16">*34 of the taxpayer * * *

The parties agree that the commodity in this case, i.e., the gold, was a capital asset in the hands of petitioner, but disagree as to whether this definition of property can be read to include commodities, in addition to commodity futures.

We note initially that the use of the words "includes only" unambiguously restricts the application of the section to property which is enumerated in the provision. Respondent, nevertheless, argues that physical commodities should be found to be within the scope of the provision and that the legislative history of the predecessor of section 1233 supports such an interpretation. Assuming that an examination of the legislative history is appropriate in these circumstances, we find that it does not support respondent's interpretation of the provision.

The legislative history to which respondent directs our attention is the House Committee Report on the predecessor to section 1233. The report stated, in part:

At the present time it is possible for an investor in stocks to realize a capital gain in less than 6 months and obtain long-term capital gain tax treatment on it by making a short sale which will assure his gain on his1986 U.S. Tax Ct. LEXIS 16">*35 original investment, and then defer closing out the short sale until he has held his original stock investment for more than 6 months. * * *

87 T.C. 1213">*1222 * * * *

Much the same device may be used by a taxpayer to avoid tax on his profits from speculation in commodity futures. This device is not used, however, by businessmen who deal in commodity futures to offset regular business dealings in actual commodities, since they are not affected by the long-term and short-term capital gain provisions. * * *

[H. Rept. 2319, 81st Cong., 2d Sess. (1950), 1950-2 C.B. 380, 421.]

Respondent asserts that the sale here in issue was of a type which section 1233 was intended to cover and that this is demonstrated by the above portion of the legislative history. The cited language, however, read in conjunction with the use of the phrase "includes only" in the legislation, seems more likely to be an explanation of why Congress chose not to include actual commodities within the scope of the provision. Congress was apparently of the belief that actual commodities would only be dealt in by those who were regularly in the business of dealing in commodity futures and who would 1986 U.S. Tax Ct. LEXIS 16">*36 not be affected by the capital gain provisions. At the very least, this language in the legislative history demonstrates Congress' awareness that actual commodities could be used to offset a short sale in the same manner as commodity futures. Congress, nevertheless, did not choose to list commodities as a type of property to which section 1233(b) and (d) should apply.

We also take note of the provisions of section 1234, which deal with the sale or exchange of, or the failure to exercise, an option to buy or sell property. This section defines the scope of the property to which it applies as follows:

SEC. 1234(b). Treatment of Grantor of Option in the Case of Stock, Securities, or Commodities. --

* * * *

(2) Definitions. -- For purposes of this subsection --

* * * *

(B) Property. -- The term "property" means stocks and securities (including stocks and securities dealt with on a "when issued" basis), commodities, and commodity futures. [Emphasis added.]

87 T.C. 1213">*1223 While respondent's policy argument as to why actual commodities should be treated as being within the scope of section 1233 may have some merit, we do not believe that the intended scope of the section encompasses actual commodities. As the application of section 1233 is the only basis respondent has put forward for treating petitioner's gain as short-term rather than long-term capital gain, we will grant petitioner's motion for partial summary judgment as to this issue as well.

To reflect the foregoing,

An appropriate order will be issued. 87 T.C. 1213">*1224