The line between hedging and speculation is critical, especially if a loss occurs. Although gains from speculative transactions are capital gains, losses are capital losses. Gains or losses arising from speculative transactions are treated as if they were 60 percent long-term and 40 percent short-term without regard to the actual holding period. Long-term capital losses can be used to offset long-term capital gains and, for individuals, up to $3,000 of ordinary income each year.



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.