§ 1234A. Gains or losses from certain terminations
Gain or loss attributable to the cancellation, lapse, expiration, or other termination of—
(1)
a right or obligation (other than a securities futures contract, as defined in section
1234B) with respect to property which is (or on acquisition would be) a capital asset in the hands of the taxpayer, or
(2)
a section
1256 contract (as defined in section
1256) not described in paragraph (1) which is a capital asset in the hands of the taxpayer,
shall be treated as gain or loss from the sale of a capital asset. The preceding sentence shall not apply to the retirement of any debt instrument (whether or not through a trust or other participation arrangement).