Suppose that in September 2006 you take a long position in a contract on May 2007 crude oil futures. You close out your position in March 2007. The futures price (per barrel) is $18.30 when you enter into your contract, $20.50 when you close out your position, and $19.10 at the end of December 2006. One contract is for the delivery of 1,000 barrels. What is your total profit? When is it realized? How is it taxed if you are

(a) a hedger and

(b) a speculator? Assume that you have a December 31 year-end.