Page:United States Statutes at Large Volume 104 Part 2.djvu/874

 104 STAT. 1388-466 PUBLIC LAW 101-508 —NOV. 5, 1990 SEC. 11325. ISSUANCE OF DEBT OR STOCK IN SATISFACTION OF INDEBT- EDNESS. (a) ISSUANCE OF DEBT INSTRUMENT. — (1) Subsection (e) of section 108 (relating to general rules for discharge of indebtedness) is amended by adding at the end thereof the following new paragraph: "(11) INDEBTEDNESS SATISFIED BY ISSUANCE OF DEBT IN- STRUMENT. — (A) IN GENERAL.—For purposes of determining income of a debtor from discharge of indebtedness, if a debtor issues a debt instrument in satisfaction of indebtedness, such debtor shall be treated as having satisfied the indebtedness with an amount of money equal to the issue price of such debt instrument. (B) ISSUE PRICE.— For purposes of subparagraph (A), the issue price of any debt instrument shall be determined under sections 1273 and 1274. For purposes of the preceding sentence, section 1273(b)(4) shall be applied by reducing the stated redemption price of any instrument by the portion of such stated redemption price which is treated as interest for purposes of this chapter." (2) Subsection (a) of section 1275 is amended by striking paragraph (4) and redesignating paragraph (5) as paragraph (4). (b) LIMITATION ON STOCK FOR DEBT EXCEPTION. — (1) IN GENERAL.— Subparagraph (B) of section 108(e)(10) is amended to read as follows: "(B) EXCEPTION FOR CERTAIN STOCK IN TITLE ii CASES AND INSOLVENT DEBTORS.— " (i) IN GENERAL.— Subparagraph (A) shall not apply to any trsinsfer of stock of the debtor (other than disqualified stock)— "(I) by a debtor in a title 11 case, or "(II) by any other debtor but only to the extent such debtor is insolvent, " (ii) DISQUALIFIED STOCK. —For purposes of clause (i), the term 'disqualified stock' means any stock with a stated redemption price if— "(I) such stock has a fixed redemption date, "(II) the issuer of such stock has the right to redeem such stock at one or more times, or "(III) the holder of such stock has the right to require its redemption at one or more times." (2) CONFORMING AMENDMENT.— Paragraph (8) of section 108(e) is amended by adding at the end thereof the following new sentence: "Any stock which is disqualified stock (as defined in paragraph (lOXBXii)) shall not be treated as stock for purposes of this paragraph. " 26 USC 108note. (c) EFFECTIVE DATE. — (1) IN GENERAL.— Except as provided in paragraph (2), the amendments made by this section shall apply to debt instruments issued, and stock transferred, after October 9, 1990, in satisfaction of any indebtedness. (2) EXCEPTIONS. —The amendments made by this section shall not apply to any debt instrument issued, or stock transferred, in

�