Abstract
Derivatives contracts may be classified by the nature of the rights of the parties, but they may be classified also based on the function or purpose. An old line of US case law raises a potential for classifying derivative contracts that are neither hedges nor call for delivery as wagering contracts. Losses from wagering contracts are deductible only to the extent of wagering gains.
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More From: Finance and Capital Markets (formerly Derivatives & Financial Instruments)
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