Page:United States Statutes at Large Volume 83.djvu/637

 83 STAT. ]

PUBLIC LAW 91-1^2-DEC. 30, 1969

609

evidence of indebtedness which is payable on demand, or which is issued by a corporation or a government or political subdivision thereof (A) with interest coupons attached or in registered form (other than one in registered form which the taxpayer establishes will not be readily tradable in an established securities market), or (B) in any other form designed to render such bond or other evidence of indebtedness readily tradable in an established securities market, shall not be treated as an evidence of indebtedness of the purchaser." (b) EFFECTIVE DATE.—The aniendment made by subsection (a) shall apply to sales or other dispositions occurring after May 27, 1969, which are not made pursuant to a binding written contract entered into on or before such date. SEC. 413. BONDS AND OTHER EVIDENCES OF INDEBTEDNESS.

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(a) BONDS AND OTHER EVIDENCES OF INDEBTEDNESS.—Section 1232

(a) (relating to general rule) is amended to read as follows: "(a) GENERAL RULE. — For purposes of this subtitle, in the case of bonds, debentures, notes, or certificates or other evidences of indebtedness, which are capital assets in the hands of the taxpayer, and which are issued by any corporation, or by any government or political subdivision thereof— "(1) RETIREMENT.—Amounts received by the holder on retirement of such bonds or other evidences of indebtedness shall be considered as amounts received in exchange therefor (except that in the case of bonds or other evidences of indebtedness issued before January 1, 1955, this paragraph shall apply only to those issued with interest coupons or in registered form, or to those in such form on March 1, 1954). "(2) SALE OR EXCHANGE.— " (A) CORPORATE BONDS ISSUED AFTER

M A Y 27, 1969.—

Except as provided in subparagraph (C), on the sale or exchange of bonds or other evidences of indebtedness issued by a corporation after May 27, 1969, held by the taxpayer more than 6 months, any gain realized shall (except as provided in the following sentence) be considered gain from the sale or exchange of a capital asset held for more than 6 months. If at the time of original issue there was an intention to call the bond or other evidence of indebtedness before maturity, any gain realized on the sale or exchange thereof which does not exceed an amount equal to the original issue discount (as defined in subsection (b)) reduced by the portion of original issue discount previouslj^ includible in the gross income of any holder (as provided in paragraph (3)(B)) shall be considered as gain from the sale or exchange of property which is not a capital asset. " (B) CORPORATE BONDS ISSUED ON OR BEFORE MAT 27, 1969, AND GOVERNMENT BONDS.—Except as provided in subparagraph (C), on the sale or exchange of bonds or other evidences of indebtedness issued by a government or political subdivision thereof after December 31, 1954, or by a corporation after December 31, 1954, and on or before May 27, 1969, held by the taxpayer more than 6 months, any gain realized 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

^SA Stat. 326, ^^ "^*^ ^^^^'

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