|This article is part of a series on|
|Taxation in the|
United States of America
|United States portal|
A 988 transaction is a transaction described in section 988(c)(1) of the Internal Revenue Code in the United States of America. This transaction occurs when a taxpayer enters into or acquires any debt instrument, forward contract, futures contract, option, or similar financial instrument held in a non-functional currency. The rules for 988 transactions do not apply to any regulated futures contract or non-equity options which would be marked to market under 26 USCA § 1256 (1256 contract) if held on the last day of the taxable year.