Section 1.1256(e)-1 - Identification of hedging transactions(a)Identification and recordkeeping requirements. Under section 1256(e)(2), a taxpayer that enters into a hedging transaction must identify the transaction as a hedging transaction before the close of the day on which the taxpayer enters into the transaction.(b)Requirements for identification. The identification of a hedging transaction for purposes of section 1256(e)(2) must satisfy the requirements of § 1.1221-2(f)(1) . Solely for purposes of section 1256(f)(1), however, an identification that does not satisfy all of the requirements of § 1.1221-2(f)(1) is nevertheless treated as an identification under section 1256(e)(2).(c)Consistency with § 1.1221-2 . Any identification for purposes of § 1.1221-2(f)(1) is also an identification for purposes of this section. If a taxpayer satisfies the requirements of § 1.1221-2(g)(1)(ii) , the transaction is treated as if it were not identified as a hedging transaction for purposes of section 1256(e)(2).(d)Effective date. The rules of this section apply to transactions entered into on or after March 20, 2002.T.D. 8985, 67 FR 12870 , Mar. 20, 2002; 67 FR 31955 , May 13, 2002