Page:United States Statutes at Large Volume 72 Part 1.djvu/1685

 72 S T A T. ]

PUBLIC LAW 8 5 - 8 6 6 - S E P T. 2, 1958

1643

from the date of original issue to the date of maturity," and inserting in lieu thereof "which does not exceed— " (i) an amount equal to the original issue discount (as defined in subsection (b)), or "(ii) if at the time of original issue there was no intention to call the bond or other evidence of indebtedness before maturity, an amount which bears the same ratio to the original issue discount (as defined in subsection (b)) as the number of complete months that the bond or other evidence of indebtedness was held by the taxpayer bears to the number of complete months from the date of original issue to the date of maturity,", (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to taxable years ending after December 81, 1957, but only with respect to dispositions after such date.

SEC. 51. BONDS WITH COUPONS DETACHED. Section 1232(c) (relating to bonds with excess number of coupons detached) is amended to read as follows: "(c) BOND W I T H UNMATURED COUPONS DETACHED.—If a bond or other evidence of indebtedness issued at any time with interest coupons— "(1) is purchased after August 16, 1954, and before January 1, 1958, and the purchaser does not receive all the coupons which first become payable more than 12 months after the date of the purchase, or "(2) is purchased after December 31, 1957, and the purchaser does not receive all the coupons which first become payable after the date of the purchase, then the gain on the sale or other disposition of such evidence of indebtedness by such purchaser (or by a person whose basis is determined by reference to the basis in the hands of such purchaser) shall be considered as gain from the sale or exchange of property which is not a capital asset to the extent that the fair market value (determined as of the time of the purchase) of the evidence of indebtedness with coupons attached exceeds the purchase price. If this subsection and subsection (a)(2)(A) apply with respect to gain realized on the sale or exchange of any evidence of indebtedness, then subsection (a) (2)(A) shall apply with respect to that part of the gain to which this subsection does not apply." SEC. 52. SHORT SALES. (a)

SHORT SALES MADE BY DEALERS I N SECURITIES.—Section 1233

(relating to gains and losses in case of short sales) is amended by adding at the end of subsection (e) thereof the following new paragraph: "(4^ (A) I n the case of a taxpayer who is a dealer in securities (within the meaning of section 1236)— "(i) if, on the date of a short sale of stock, substantially identical property which is a capital asset in the hands of the taxpayer has been held for not more than 6 months, and "(ii) if such short sale is closed more than 20 days after the date on which it was made, subsection (b)(2) shall apply in respect of the holding period of such substantially identical property. " (B) For purposes of subparagraph (A) — "(i) the last sentence of subsection (b) applies; and "(ii) the term 'stock' means any share or certificate of stock in a corporation, any bond or other evidence of indebtedness which is convertible into any such share or certificate,

26 USC 1232.

26 USC 1233.

26 USC 1236.

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