shall be treated as a derivative for purposes of this part. If the derivative component cannot be separately valued, then the entire contract shall be treated as a derivative for purposes of this part. (2) Exception for certain embedded derivative components of debt instruments A debt instrument shall not be treated as having a derivative component merely because— (A) such debt instrument is denominated in a nonfunctional currency (as defined in section 988(c)(1)(C)(ii)), or (B) payments with respect to such debt instrument are determined by reference to the value of a nonfunctional currency (as so defined). (d) Treatment of American Depository Receipts and similar instruments Except as otherwise provided by the Secretary, for purposes of this part, American depository receipts (and similar instruments) with respect to shares of stock in foreign corporations shall be treated as shares of stock in such foreign corporations. B Similar contracts Sec. 494. Tax treatment of contracts similar to derivatives. 494. Tax treatment of contracts similar to derivatives (a) In general For purposes of this title, if there is a taxable transaction with respect to any applicable property interest, then, notwithstanding any other provision of this title other than section 1032, gain or loss attributable to the taxable transaction shall be considered gain or loss from the sale or exchange of property which has the same character as the property to which the applicable property interest relates has (or would have) in the hands of the taxpayer. (b) Definitions For purposes of this section— (1) Applicable property interest The term applicable property interest means any right or obligation with respect to property other than— (A) a derivative (as defined in section 493), or (B) any position in applicable property to which section 1092 applies. (2) Taxable transaction The term taxable transaction means, with respect to any applicable property interest— (A) any termination or transfer (as defined in section 491(c)(3)) of such interest,