Page:United States Statutes at Large Volume 96 Part 1.djvu/542

 96 STAT. 500

PUBLIC LAW 97-248—SEPT. 3, 1982 "(2) such bond's or coupon's ratable s h a r e of the purchase price. For purposes of paragraph (2), ratable s h a r e s shall be determined on the basis of the i r respective fair m a r k e t values on the date of purchase. "(b) T A X T R E A T M E N T OF P E R S O N S T R I P P I N G B O N D. — For purposes of

this subtitle, if any person strips 1 or more coupons from a bond and after July 1, 1982, disposes of the bond or such coupon— "(1) such person shall include in gross income a n a m o u n t equal to the interest accrued on such bond before the time that such coupon or bond was disposed of (to the extent such interest has not theretofore been included in such person's gross income), "(2) the basis of the bond and coupons shall be increased by the a m o u n t of the accrued interest described in paragraph (1), "(3) the basis of the bond and coupons immediately before the disposition (as adjusted pursuant to paragraph (2)) shall be allocated among the items retained by such person and the items disposed of by such person on the basis of the i r respective fair m a r k e t values, and "(4) for purposes of subsection (a), such person shall be t r e a t e d as having purchased on the date of such disposition each such item which he r e t a i n s for a n a m o u n t equal to the basis allocated to such item under paragraph (3). A rule similar to the rule of paragraph (4) shall apply in the case of any person whose basis in any bond or coupon is determined by reference to the basis of the person described in the preceding sentence. "(c) R E T E N T I O N OF E X I S T I N G L A W FOR STRIPPED BONDS P U R C H A S E D

26 USC 1232.

BEFORE J U L Y 2, 1982.—If a bond issued a t 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 before July 2, 1982, 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 bond by such purchaser (or by a person whose basis is determined by reference to the basis in the h and s of such purchaser) shall be considered as ordinary income to the extent that the fair m a r k e t value (determined as of the time of the purchase) of the bond with coupons attached exceeds the purchase price. If this subsection and section 1232(a)(2)(A) apply with respect to gain realized on the sale or exchange of any evidence of indebtedness, then section 1232(a)(2)(A) shall apply with respect to that part of the gain to which this subsection does not apply. "(d) SPECIAL RULES FOR T A X - E X E M P T OBLIGATIONS.—In the case of

any obligation the interest on which is not includible in gross income under section 103 or is exempt from tax (without regard to the identity of the holder) under any other provision of law— "(1) subsections (a) and (b)(1) shall not apply, "(2) the rules of subsection (b)(4) shall apply for purposes of subsection (c), and "(3) subsection (c) shall be applied without regard to the requirement that the bond be purchased before July 2, 1982.

�