Bona fide debt service fund

Bona fide debt service fund means a fund, which may include proceeds of an issue, that -
(1) Is used primarily to achieve a proper matching of revenues with principal and interest payments within each bond year; and
(2) Is depleted at least once each bond year, except for a reasonable carryover amount not to exceed the greater of:
(i) the earnings on the fund for the immediately preceding bond year; or
(ii) one-twelfth of the principal and interest payments on the issue for the immediately preceding bond year.

Source

26 CFR § 1.148-1


Scoping language

None
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