Clear reflection o f incom e Sample Clauses

Clear reflection o f incom e. The method o f accounting used by a taxpayer for a hedging transaction must clearly reflect income. To clearly reflect income, the method used must reasonably match the timing of income, deduction, gain, or loss from the hedging transaction with the timing of income, deduction, gain, or loss from the item or items being hedged. Taking gains and losses into account in the period in w hich they are realized may dearly reflect income in the case of certain hedging transactions. For example, where a hedge and the item being hedged are disposed o f in the same taxable year, taking realized gain or loss into account on both items in that taxable year may clearly reflect income. In the case of many hedging transactions, however, taking gains and losses into account as they are realized does not result in the matching required by this section.