; treatment of short sales (1) In general If the taxpayer (or a related person) enters into any transaction which substantially reduces the risk of loss from holding any asset, such asset shall not be treated as an indexed asset for the period of such reduced risk. (2) Short sales (A) In general In the case of a short sale of an indexed asset with a short sale period in excess of 3 years, for purposes of this title, the amount realized shall be an amount equal to the amount realized (determined without regard to this paragraph) increased by the applicable inflation adjustment. In applying subsection (d)(2) for purposes of the preceding sentence, the date on which the property is sold short shall be treated as the date of acquisition and the closing date for the sale shall be treated as the date of disposition. (B) Short sale period For purposes of subparagraph (A), the short sale period begins on the day that the property is sold and ends on the closing date for the sale. (f) Dispositions between related persons (1) In general This section shall not apply to any sale or other disposition of property between related persons except to the extent that the basis of such property in the hands of the transferee is a substituted basis. (2) Related persons defined For purposes of this section, the term related persons means— (A) persons bearing a relationship set forth in section 267(b), and (B) persons treated as single employer under subsection (b) or (c) of section 414. (g) Transfers To increase indexing adjustment If any person transfers cash, debt, or any other property to another person and the principal purpose of such transfer is to secure or increase an adjustment under subsection (a), the Secretary may disallow part or all of such adjustment or increase. (h) Special rules For purposes of this section— (1) Treatment of improvements, etc If there is an addition to the adjusted basis of any tangible property or of any stock in a corporation during the taxable year by reason of an improvement to such property or a