PAYMENTS UNDER HEDGING INSTRUMENTS.

SEC. 1258. PAYMENTS UNDER HEDGING INSTRUMENTS. Section 856(c)(5)(G) (relating to treatment of certain interest rate agreements), as redesignated by section 1255, is amended to read as follows: “(G) Treatment of certain hedging instruments.—Except to the extent provided by regulations, any— “(i) payment to a real estate investment trust under an interest rate swap or cap agreement, option, futures contract, forward rate agreement, or any similar financial instrument, entered into by the trust in a transaction to reduce the interest rate risks with respect to any indebtedness incurred or to be incurred by the trust to acquire or carry real estate assets, and “(ii) gain from the sale or other disposition of any such investment, shall be treated as income qualifying under paragraph (2).”.