Page:United States Statutes at Large Volume 98 Part 1.djvu/602

 98 STAT. 554 Ante, p. 538.

PUBLIC LAW 98-369—JULY 18, 1984 using a discount rate equal to 120 percent of the applicable Federal rate determined under section 1274(d). "(c) PAYMENTS TO WHICH SUBSECTION (a) APPLIES.—

"(1) IN GENERAL.—Except as provided in subsection (d), this section shall apply to any payment on account of the sale or exchange of property which constitutes part or all of the sales price and which is due more than 6 months after the date of such sale or exchange under a contract— "(A) under which some or all of the payments are due more than 1 year after the date of such sale or exchange, and "(B) under which, using a discount rate equal to 110 percent of the applicable Federal rate determined under section 1274(d), there is total unstated interest. "(2) TREATMENT OF OTHER DEBT INSTRUMENTS.—For purposes of this section, a debt instrument of the purchaser which is given in consideration for the sale or exchange of property shall not be treated as a payment, and any payment due under such debt instrument shall be treated as due under the contract for the sale or exchange. "(3) DEBT INSTRUMENT DEFINED.—For purposes of this subsection, the term 'debt instrument' has the meaning given such term by section 1275(a)(1).

Ante, p. 540.

"(d) EXCEPTIONS AND LIMITATIONS.— "(1) COORDINATION WITH ORIGINAL ISSUE DISCOUNT RULES.—

This section shall not apply to any debt instrument to which section 1272 applies. "(2) SALES PRICES OF $3,000 OR LESS.—This section shall not apply to any payment on account of the sale or exchange of property if it can be determined at the time of such sale or exchange that the sales price cannot exceed $3,000. "(3) CARRYING CHARGES.—In the case of the purchaser, the tax treatment of amounts paid on account of the sale or exchange of property shall be made without regard to this section if any such amounts are treated under section 163(b) as if they included interest. "(4) CERTAIN SALES OF PATENTS.—In the case of any transfer described in section 1235(a) (relating to sale or exchange of patents), this section shall not apply to any amount contingent on the productivity, use, or disposition of the property transferred.

Ante, p. 533.

"(e) INTEREST RATES IN CASE OF SALES OF PRINCIPAL RESIDENCES OR FARM LANDS.—

"(1) IN GENERAL.—In the case of any debt instrument arising from a sale or exchange to which this subsection applies, subsections (b) and (c)(1)(B) shall be applied by using, in lieu of the discount rates determined under such subsections, discount rates determined under subsections (b) and (c)(D, respectively, of this section as it was in effect before the amendments made by the Tax Reform Act of 1984.

Ante, p. 494.

"(2) SALES OR EXCHANGES TO WHICH SUBSECTION APPLIES.—This

subsection shall apply— "(A) to any sale or exchange by an individual of his principal residence (within the meaning of section 1034), Mn,H'A:st.

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