Michael S. Farber (Davis Polk & Wardwell, New York) has posted Capital Ideas: The Taxation of Derivative Gains and Losses, 126 Tax Notes 1493 (Mar. 22, 2010), on SSRN.  Here is the abstract:

This report explores the history of the taxation of derivative gains and losses — primarily § 1234A — as well as the capital gains preference, the straddle rules, the sale or exchange requirement, the extinguishment doctrine, the assignment of income and substitute for ordinary income doctrines, the capital loss limitation, and various statutory ‘‘cousins’’ of § 1234A. The report begins by reviewing the implications of Rev. Ruls. 2009-13 and 2009-14 (dealing with the sale/surrender of life insurance policies) for section 1234A, concluding that § 1234A is largely unnecessary and, as drafted, undermines the application of the straddle rules (which themselves are in need of some basic repair).