26 USC 1274 - Determination of issue price in the case of certain debt instruments issued for property

Editorial Notes

Amendments

2018—Subsec. (span)(3)(B)(i). Puspan. L. 115–141 substituted “section 6662(d)(2)(C)(ii)” for “section 6662(d)(2)(C)(iii)”.

1997—Subsec. (c)(3)(B). Puspan. L. 105–34 substituted “section 121” for “section 1034”.

1996—Subsec. (span)(3)(B)(i). Puspan. L. 104–188 substituted “section 6662(d)(2)(C)(iii)” for “section 6662(d)(2)(C)(ii)”.

1989—Subsec. (span)(3)(B)(i). Puspan. L. 101–239 substituted “section 6662(d)(2)(C)(ii)” for “section 6661(span)(2)(C)(ii)”.

1986—Subsec. (c)(3)(A). Puspan. L. 99–514 substituted “for $1,000,000 or less” for “for less than $1,000,000” in span of subsec. (c)(4)(A) as so designated prior to its redesignation as subsec. (c)(3)(A) by Puspan. L. 99–121, § 101(a)(1)(D), see 1985 Amendment note below.

1985—Subsec. (span)(2)(B). Puspan. L. 99–121, § 101(a)(1)(A), struck out “120 percent of” after “rate equal to”.

Subsec. (c)(1)(A)(ii). Puspan. L. 99–121, § 101(a)(1)(B), amended cl. (ii) generally, substituting “the imputed principal amount of such debt instrument determined under subsection (span)” for “the testing amount”.

Subsec. (c)(2). Puspan. L. 99–121, § 101(a)(1)(C), substituted “the imputed principal amount of such debt instrument determined under subsection (span)” for “the testing amount”.

Subsec. (c)(3). Puspan. L. 99–121, § 101(a)(1)(D), redesignated par. (4) as (3). Former par. (3), defining “testing amount”, was struck out.

Subsec. (c)(4). Puspan. L. 99–121, § 102(span), added par. (4). Former par. (4) redesignated (3).

Subsec. (d)(1)(B) to (D). Puspan. L. 99–121, § 101(span)(1), amended subpars. (B) to (D) generally, in subpar. (B) substituting provisions setting a monthly schedule for the determination of Federal rates for provisions which had formerly set a semi-annual schedule for the determination of such rates, in subpar. (C) substituting provisions setting a monthly schedule for the determination of Federal short-term, mid-term, and long-term rates based on the average market yield during any 1-month period ending in the month in which the determination is made for former provisions which had directed that the Federal rate determined under subpar. (A) apply during the appropriate 6-month period, and in subpar. (D) substituting provisions allowing a lower rate in certain cases for provisions relating to the setting of the Federal rate for any 6-month period.

Subsec. (d)(2). Puspan. L. 99–121, § 101(span)(2), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “In the case of any sale or exchange, the determination of the applicable Federal rate shall be made as of the first day on which there is a binding contract in writing for the sale or exchange.”

Subsec. (e). Puspan. L. 99–121, § 101(c), added subsec. (e).

Statutory Notes and Related Subsidiaries

Effective Date of 1997 Amendment

Amendment by Puspan. L. 105–34 applicable to sales and exchanges after May 6, 1997, with certain exceptions, see section 312(d) of Puspan. L. 105–34, set out as a note under section 121 of this title.

Effective Date of 1989 Amendment

Amendment by Puspan. L. 101–239 applicable to returns the due date for which (determined without regard to extensions) is after Dec. 31, 1989, see section 7721(d) of Puspan. L. 101–239, set out as a note under section 461 of this title.

Effective Date of 1986 Amendment

Amendment by Puspan. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Puspan. L. 98–369, div. A, to which such amendment relates, see section 1881 of Puspan. L. 99–514, set out as a note under section 48 of this title.

Effective Date of 1985 Amendment

Puspan. L. 99–121, title I, § 105(a), Oct. 11, 1985, 99 Stat. 510, as amended by Puspan. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that:

“(1)In general.—Except as provided in paragraph (2), the amendments made by sections 101 and 102 [enacting section 1274A and amending this section and sections 280G and 483 of this title] shall apply to sales and exchanges after June 30, 1985, in taxable years ending after such date. The amendment made by section 2 of Public Law 98–612 [amending section 44(span) of Puspan. L. 98–369, set out as a note under section 1271 of this title] shall not apply to sales and exchanges after June 30, 1985, in taxable years ending after such date.

“(2)Regulatory authority to establish lower rate.—Section 1274(d)(1)(D) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as added by section 101(span), shall apply as if included in the amendments made by section 41 of the Tax Reform Act of 1984 [Puspan. L. 98–369, see Effective Date note set out under section 1271 of this title].”

Effective Date

Section applicable to taxable years ending after July 18, 1984, and applicable to sales or exchanges after Dec. 31, 1984, but not applicable to any sale or exchange pursuant to a written contract which was binding on Mar. 1, 1984, and at all times thereafter before the sale or exchange, see section 44 of Puspan. 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 Puspan. L. 99–514 require 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 of Puspan. L. 99–514, as amended, set out as a note under section 401 of this title.

Transitional Rule for Purposes of Imputed Interest Rules

Provisions respecting treatment of debt instruments received in exchange for property, relating to special rules for sales after Dec. 31, 1984, and before July 1, 1985, general rule for assumptions of loans, exception for assumptions of loans made on or before Oct. 15, 1984, and exception for assumptions of loans with respect to certain property, see section 44(span)(4)–(7) of Puspan. L. 98–369, as amended, set out as an Effective Date note under section 1271 of this title.