26 U.S. Code § 1275 - Other definitions and special rules
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For purposes of this subpart—
(1) Debt instrument
(A) In general
Except as provided in subparagraph (B), the term “debt instrument” means a bond, debenture, note, or certificate or other evidence of indebtedness.
(B) Exception for certain annuity contracts
The term “debt instrument” shall not include any annuity contract to which section 72 applies and which—
(ii) is issued by an insurance company subject to tax under subchapter L (or by an entity described in section 501 (c) and exempt from tax under section 501 (a) which would be subject to tax under subchapter L were it not so exempt)—
(I) in a transaction in which there is no consideration other than cash or another annuity contract meeting the requirements of this clause,
(II) pursuant to the exercise of an election under an insurance contract by a beneficiary thereof on the death of the insured party under such contract, or
(2) Issue date
(A) Publicly offered debt instruments
In the case of any debt instrument which is publicly offered, the term “date of original issue” means the date on which the issue was first issued to the public.
(B) Issues not publicly offered and not issued for property
(3) Tax-exempt obligation
The term “tax-exempt obligation” means any obligation if—
(A) the interest on such obligation is not includible in gross income under section 103, or
(b) Treatment of borrower in the case of certain loans for personal use
(1) Sections 1274 and 483 not to apply
(2) Original issue discount deducted on cash basis in certain cases
In the case of any debt instrument, if—
(A) such instrument—
(B) the obligor under such instrument uses the cash receipts and disbursements method of accounting,
(3) Personal use property
For purposes of this subsection, the term “personal use property” means any property substantially all of the use of which by the taxpayer is not in connection with a trade or business of the taxpayer or an activity described in section 212. The determination of whether property is described in the preceding sentence shall be made as of the time of issuance of the debt instrument.
(c) Information requirements
(1) Information required to be set forth on instrument
(A) In general
In the case of any debt instrument having original issue discount, the Secretary may by regulations require that—
be set forth on such instrument.
(B) Special rule for instruments not publicly offered
In the case of any issue of debt instruments not publicly offered, the regulations prescribed under subparagraph (A) shall not require the information to be set forth on the debt instrument before any disposition of such instrument by the first buyer.
(2) Information required to be submitted to Secretary
In the case of any issue of publicly offered debt instruments having original issue discount, the issuer shall (at such time and in such manner as the Secretary shall by regulation prescribe) furnish the Secretary the following information:
For purposes of the preceding sentence, any person who makes a public offering of stripped bonds (or stripped coupons) shall be treated as the issuer of a publicly offered debt instrument having original issue discount.
(4) Cross reference
For civil penalty for failure to meet requirements of this subsection, see section 6706.
(d) Regulation authority
The Secretary may prescribe regulations providing that where, by reason of varying rates of interest, put or call options, indefinite maturities, contingent payments, assumptions of debt instruments, or other circumstances, the tax treatment under this subpart (or section 163 (e)) does not carry out the purposes of this subpart (or section 163 (e)), such treatment shall be modified to the extent appropriate to carry out the purposes of this subpart (or section 163 (e)).
Source(Added and amended Pub. L. 98–369, div. A, title I, §§ 41(a), 61 (c)(2),July 18, 1984, 98 Stat. 540, 581; Pub. L. 99–514, title XVIII, § 1804(f)(2)(A),Oct. 22, 1986, 100 Stat. 2805; Pub. L. 100–647, title I, § 1006(u)(4),Nov. 10, 1988, 102 Stat. 3427; Pub. L. 101–508, title XI, § 11325(a)(2),Nov. 5, 1990, 104 Stat. 1388–466; Pub. L. 106–554, § 1(a)(7) [title III, § 318(c)(1)], Dec. 21, 2000, 114 Stat. 2763, 2763A–645.)
2000—Subsec. (a)(1)(B)(ii). Pub. L. 106–554, in introductory provisions, substituted “subchapter L (or by an entity described in section 501 (c) and exempt from tax under section 501 (a) which would be subject to tax under subchapter L were it not so exempt)” for “subchapter L”.
1990—Subsec. (a)(4), (5). Pub. L. 101–508redesignated par. (5) as (4) and struck out former par. (4) which related to a special rule for determination of issue price in case of exchange of debt instruments in reorganization.
1988—Subsec. (a)(4)(B)(ii)(I). Pub. L. 100–647substituted “subsection (a)(7)” for “subsection (a)(6)”.
1986—Subsec. (a)(4), (5). Pub. L. 99–514redesignated par. (4), relating to treatment of obligations distributed to corporations, as (5), and substituted “by corporations” for “to corporations” in heading.
1984—Subsec. (a)(4). Pub. L. 98–369, § 61(c)(2), added par. (4) relating to treatment of obligations distributed to corporations.
Effective Date of 2000 Amendment
Pub. L. 106–554, § 1(a)(7) [title III, § 318(c)(2)], Dec. 21, 2000, 114 Stat. 2763, 2763A–645, provided that: “The amendment made by this subsection [amending this section] shall take effect as if included in the amendments made by section 41 of the Tax Reform Act of 1984 [Pub. L. 98–369, div. A].”
Effective Date of 1990 Amendment
Amendment by Pub. L. 101–508applicable, with certain exceptions, to debt instruments issued and stock transferred after Oct. 1, 1990, in satisfaction of any indebtedness, see section 11325(c) ofPub. L. 101–508, set out as a note under section 108 of this title.
Effective Date of 1988 Amendment
Amendment by Pub. L. 100–647effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) ofPub. L. 100–647, set out as a note under section 1 of this title.
Effective Date of 1986 Amendment
Amendment by Pub. L. 99–514effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 ofPub. L. 99–514, set out as a note under section 48 of this title.
Effective Date of 1984 Amendment
Amendment by Pub. L. 98–369applicable with respect to distributions declared Mar. 15, 1984, in taxable years ending after that date, see section 61(e)(3) ofPub. L. 98–369, set out as a note under section 312 of this title.
Section applicable to taxable years ending after July 18, 1984, but subsec. (c) of this section effective on the day 30 days after July 18, 1984, see section 44 ofPub. L. 98–369, set out as a note under section 1271 of this title.
Plan Amendments Not Required Until January 1, 1989
For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 ofPub. L. 99–514, as amended, set out as a note under section 401 of this title.