Recognition of loss in case of straddles, etc (1) Limitation on recognition of loss (A) In general Any loss with respect to 1 or more positions shall be taken into account for any taxable year only to the extent that the amount of such loss exceeds the unrecognized gain (if any) with respect to 1 or more positions which were offsetting positions with respect to 1 or more positions from which the loss arose. (B) Carryover of loss Any loss which may not be taken into account under subparagraph (A) for any taxable year shall, subject to the limitations under subparagraph (A), be treated as sustained in the succeeding taxable year. (2) Unrecognized gain For purposes of this subsection— (A) In general The term unrecognized gain means— (i) in the case of any position held by the taxpayer as of the close of the taxable year, the amount of gain which would be taken into account with respect to such position if such position were sold on the last business day of such taxable year at its fair market value, and (ii) in the case of any position with respect to which, as of the close of the taxable year, gain has been realized but not recognized, the amount of gain so realized. (B) Reporting of gain Each taxpayer shall disclose to the Secretary, at such time and in such manner and form as the Secretary may prescribe by regulations— (i) each position (whether or not part of a straddle) with respect to which, as of the close of the taxable year, there is unrecognized gain, and (ii) the amount of such unrecognized gain. The Secretary may waive the requirement to report under this subparagraph with respect to any position if such reporting is not required to carry out the purposes of this section. (3) Special rules for physically settled positions For purposes of this subsection, if a taxpayer settles a position which is part of a straddle by delivering property to which the position relates (and such position, if terminated, would result in a realization of a loss), then such taxpayer shall be treated as if such taxpayer— (A)