26 U.S. Code § 1288 - Treatment of original issue discount on tax-exempt obligations
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(a) General rule
Original issue discount on any tax-exempt obligation shall be treated as accruing—
(1) for purposes of section 163, in the manner provided by section 1272 (a) (determined without regard to paragraph (7) thereof), and
(b) Definitions and special rules
For purposes of this section—
(1) Original issue discount
The term “original issue discount” has the meaning given to such term by section 1273 (a) without regard to paragraph (3) thereof. In applying section 483 or 1274, under regulations prescribed by the Secretary, appropriate adjustments shall be made to the applicable Federal rate to take into account the tax exemption for interest on the obligation.
(2) Tax-exempt obligation
Source(Added Pub. L. 98–369, div. A, title I, § 41(a),July 18, 1984, 98 Stat. 553; amended Pub. L. 100–647, title I, § 1006(u)(3),Nov. 10, 1988, 102 Stat. 3427.)
1988—Subsec. (a). Pub. L. 100–647substituted “paragraph (7)” for “paragraph (6)” in pars. (1) and (2).
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.
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