12 U.S.C. § 5261: Gain or loss from sale or exchange of certain preferred stock

For purposes of title 26, gain or loss from the sale or exchange of any applicable preferred stock by any applicable financial institution shall be treated as ordinary income or loss. the Federal National Mortgage Association, established pursuant to the Federal National Mortgage Association Charter Act ( 12 U.S.C. 1716 et seq.), or the Federal Home Loan Mortgage Corporation, established pursuant to the Federal Home Loan Mortgage Corporation Act ( 12 U.S.C. 1451 et seq.), and was held by the applicable financial institution on September 6, 2008 , or was sold or exchanged by the applicable financial institution on or after January 1, 2008 , and before September 7, 2008 . a financial institution referred to in section 582(c)(2) of title 26 , or a depository institution holding company (as defined in section 1813(w)(1) of this title ). a sale or exchange described in subsection (b)(2)(B), an entity shall be treated as an applicable financial institution only if it was an entity described in subparagraph (A) or (B) of paragraph (1) at the time of the sale or exchange, and a sale or exchange after September 6, 2008 , of preferred stock described in subsection (b)(2)(A), an entity shall be treated as an applicable financial institution only if it was an entity described in subparagraph (A) or (B) of paragraph (1) at all times during the period beginning on September 6, 2008 , and ending on the date of the sale or exchange of the preferred stock. an applicable financial institution sells or exchanges applicable preferred stock after September 6, 2008 , which the applicable financial institution did not hold on such date, but the basis of which in the hands of the applicable financial institution at the time of the sale or exchange is the same as the basis in the hands of the person which held such stock on such date, or held such stock on September 6, 2008 , and later sold or exchanged such stock, or sold or exchanged such stock during the period described in subsection (b)(2)(B). The Secretary of the Treasury or the Secretary’s delegate may prescribe such guidance, rules, or regulations as are necessary to carry out the purposes of this section. This section shall apply to sales or exchanges occurring after December 31, 2007 , in taxable years ending after such date.