Page:United States Statutes at Large Volume 98 Part 1.djvu/588

 98 STAT. 540 POSE,

PUBLIC LAW 98-369—JULY 18, 1984 "(F) SALES OR EXCHANGES TO WHICH SECTION 483(e) APPLIES.—Any debt instrument to the extent section 483(e) (relating to certain land transfers between related persons) applies to such instrument.

p. 553.

"(d) DETERMINATION OF APPLICABLE FEDERAL RATE.—For purposes

of this section— "(1) APPLICABLE FEDERAL RATE.— "(A) IN GENERAL.— "In the case of a debt instrument with a term of: Not over 3 years Over 3 years but not over 9 years. Over 9 years

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The applicable Federal rate is: The Federal short-term rate. The Federal mid-term rate, The Federal long-term rate.

"(B) DETERMINATION OF RATES.—Within 15 days after the close of— "(i) the 6-month period ending on September 30 of any calendar year, or "(ii) the 6-month period ending on March 31 of any calendar year, the Secretary shall determine the Federal short-term rate, mid-term rate, and long-term rate for such 6-month period. "(C) EFFECTIVE DATE OF DETERMINATION.—Any Federal rate determined under subparagraph (A) shall— "(i) apply during the 6-month period beginning on January 1 of the succeeding calendar year in the case of a determination made under subparagraph (B)(i), and "(ii) apply during the 6-month period beginning on July 1 of the calendar year in the case of a determination made under subparagraph (B)(ii). "(D) FEDERAL RATE FOR ANY 6-MONTH PERIOD.—For purposes of this paragraph— "(i) FEDERAL SHORT-TERM RATE.—The Federal shortterm rate for any 6-month period shall be the rate determined by the Secretary based on the average market yield (during such 6-month period) on outstanding marketable obligations of the United States with remaining periods to maturity of 3 years or less. "(ii) FEDERAL MID-TERM AND LONG-TERM RATES.—The

Federal mid-term rate and long-term rate shall be determined in accordance with the principles of clause (i). "(2) RATE APPLICABLE TO ANY SALE OR EXCHANGE.—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. "(3) TERM OF DEBT INSTRUMENT.—In determining the term of a debt instrument for purposes of this subsection, under regulations prescribed by the Secretary, there shall be taken into account options to renew or extend. 26 USC 1275.

"SEC. 1275. OTHER DEFINITIONS AND SPECIAL RULES.

"(a) DEFINITIONS.—For purposes of this subpart— "(1) DEBT INSTRUMENT.—

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