Page:United States Statutes at Large Volume 98 Part 1.djvu/591

 PUBLIC LAW 98-369—JULY 18, 1984 in such manner as the Secretary shall by regulation prescribe) furnish the Secretary the following information: "(A) The amount of the original issue discount. "(B) The issue date. "(C) Such other information with respect to the issue as the Secretary may by regulations require. For purposes of the preceding sentence, any person who makes a public offering of stripped bonds (or stripped coupons) shall be treated as the issuer of a publicly offered debt instrument having original issue discount. "(3) EXCEPTIONS.—This subsection shall not apply to any obligation referred to in section 1272(a)(2) (relating to exceptions from current inclusion of original issue discount). "(4) CROSS REFERENCE.— "For civil penalty for failure to meet requirements of this subsection, see section 6706. "(d) REGULATION AUTHORITY.—The Secretary may prescribe regu-

lations providing that where, by reason of varying rates of interest, put or call options, indefinite maturities, contingent payments, assumptions of debt instruments, or other circumstances, the tax treatment under this subpart (or section 163(e)) does not carry out the purposes of this subpart (or section 163(e)), such treatment shall be modified to the extent appropriate to carry out the purposes of this subpart (or section 163(e)).

98 STAT. 543

, Ante, p. 533.

Post, p. 555.

Post, pp. 556, 654.

"Subpart B—Market Discount on Bonds SiJ;

"Sec. 1276. Disposition gain representing accrued market discount treated as ordinary income. "Sec. 1277. Deferral of interest deduction allocable to accrued market discount. "Sec. 1278. Definitions and special rules.

"SEC. 1276. DISPOSITION GAIN REPRESENTING ACCRUED MARKET DISCOUNT TREATED AS ORDINARY INCOME. "(a) ORDINARY INCOME.—

"(1) IN GENERAL.—Except as otherwise provided in this section, gain on the disposition of any market discount bond shall be treated as ordinary income to the extent it does not exceed the accrued market discount on such bond. Such gain shall be recognized notwithstanding any other provision of this subtitle. "(2) DISPOSITIONS OTHER THAN SALES, ETC.—For purposes of

paragraph (1), a person disposing of any market discount bond in any transaction other than a sale, exchange, or involuntary conversion shall be treated as realizing an amount equal to the fair market value of the bond. "(3) GAIN TREATED AS INTEREST FOR CERTAIN PURPOSES.—

Except for purposes of sections 871(a), 881, 1441, 1442, and 6049 (and such other provisions as may be specified in regulations), any amount treated as ordinary income under paragraph (1) shall be treated as interest for purposes of this title. "(b) ACCRUED MARKET DISCOUNT.—For purposes of this section— "(1) RATABLE ACCRUAL.—Except as otherwise provided in this subsection or subsection (c), the accrued market discount on any bond shall be an amount which bears the same ratio to the market discount on such bond as— "(A) the number of days which the taxpayer held the bond, bears to

26 USC 1276.

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