### Question
How does the law define closing transaction?


### Answer
Under *26 U.S.C. § 1234*, **closing transaction** is defined as:

> any termination of the taxpayer's obligation under an option in property other than through the exercise or lapse of the option

#### Citation:
  - *26 U.S.C. § 1234*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter P-Capital Gains and Losses > PART IV-SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES**

