26 U.S. Code § 1274A - Special rules for certain transactions where stated principal amount does not exceed $2,800,000
In the case of any qualified debt instrument, the discount rate used for purposes of sections 483 and 1274 shall not exceed 9 percent, compounded semiannually.
For purposes of this section, the term “qualified debt instrument” means any debt instrument given in consideration for the sale or exchange of property (other than new section 38 property within the meaning of section 48(b), as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) if the stated principal amount of such instrument does not exceed $2,800,000.
Except as provided in subparagraph (B), paragraph (1) shall apply to any successor to the borrower or lender with respect to a cash method debt instrument.
If the lender (or any successor) transfers any cash method debt instrument to a taxpayer who uses an accrual method of accounting, this paragraph shall not apply with respect to such instrument for periods after such transfer.
In the case of any debt instrument arising out of a sale or exchange during any calendar year after 1989, each dollar amount contained in the preceding provisions of this section shall be increased by the inflation adjustment for such calendar year. Any increase under the preceding sentence shall be rounded to the nearest multiple of $100 (or, if such increase is a multiple of $50, such increase shall be increased to the nearest multiple of $100).
For inflation adjustment of certain items in this section, see Revenue Rulings listed in a table below.
The date of the enactment of the Revenue Reconciliation Act of 1990, referred to in subsec. (b), is the date of enactment of Pub. L. 101–508, which was approved Nov. 5, 1990.
1996—Subsec. (c)(1)(B). Pub. L. 104–188 substituted “instrument” for “instument”.
1990—Subsec. (b). Pub. L. 101–508 inserted “, as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990” after “section 48(b)”.
Amendment by Pub. L. 101–508 applicable to property placed in service after Dec. 31, 1990, but not applicable to any transition property (as defined in section 49(e) of this title), any property with respect to which qualified progress expenditures were previously taken into account under section 46(d) of this title, and any property described in section 46(b)(2)(C) of this title, as such sections were in effect on Nov. 4, 1990, see section 11813(c) of Pub. L. 101–508, set out as a note under section 45K of this title.
Section applicable to sales and exchanges after June 30, 1985, in taxable years ending after such date, see section 105(a)(1) of Pub. L. 99–121, set out as an Effective Date of 1985 Amendment note under section 1274 of this title.
For provisions that nothing in amendment by Pub. L. 101–508 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Nov. 5, 1990, for purposes of determining liability for tax for periods ending after Nov. 5, 1990, see section 11821(b) of Pub. L. 101–508, set out as a note under section 45K of this title.
Provisions relating to inflation adjustment of items in this section for certain years were contained in the following:
2017—Revenue Ruling 2016–30.
2016—Revenue Ruling 2015–24.
2015—Revenue Ruling 2014–30.
2014—Revenue Ruling 2013–23.
2013—Revenue Ruling 2012–33.
2012—Revenue Ruling 2011–27.
2011—Revenue Ruling 2010–30.
2010—Revenue Ruling 2010–2.
2009—Revenue Ruling 2008–52.
2008—Revenue Ruling 2008–3.
2007—Revenue Ruling 2007–4.
2006—Revenue Ruling 2005–76.
2005—Revenue Ruling 2004–107.
2004—Revenue Ruling 2003–119.
2003—Revenue Ruling 2002–79.
2002—Revenue Ruling 2001–65.
2001—Revenue Ruling 2000–55.
2000—Revenue Ruling 99–50.
1999—Revenue Ruling 98–58.
1998—Revenue Ruling 97–56.
1997—Revenue Ruling 96–63.
1996—Revenue Ruling 96–4.
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