Page:United States Statutes at Large Volume 99 Part 1.djvu/530

 99 STAT. 508

Ante, p. 505. 26 USC 1274.

98 Stat. 553. 26 USC 483.

PUBLIC LAW 99-121—OCT. 11, 1985 "(A) IN GENERAL.—In the case of any debt instrument arising out of a sale or exchange during any calendar year after 1989, each dollar amount contained in the preceding provisions of this section shall be increased by the inflation adjustment for such calendar year. Any increase under the preceding sentence shall be rounded to the nearest multiple of $100 (or, if such increase is a multiple of $50, such increase shall be increased to the nearest multiple of $100). "(B) INFLATION ADJUSTMENT.—For purposes of subparagraph (A), the inflation adjustment for any calendar year is the percentage (if any) by which— "(i) the CPI for the preceding calendar year exceeds "(ii) the CPI for calendar year 1988. For purposes of the preceding sentence, the CPI for any calendar year is the average of the Consumer Price Index as of the close of the 12-month period ending on September 30 of such calendar year. "(e) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection, including— "(1) regulations coordinating the provisions of this section with other provisions of this title, "(2) regulations necessary to prevent the avoidance of tax through the abuse of the provisions of subsection (c), and "(3) regulations relating to the treatment of transfers of cash method debt instruments." (b) EXCEPTION FOR ASSUMPTIONS.—Subsection (c) of section 1274 of such Code is amended by adding at the end thereof the following new paragraph: "(4) EXCEPTION FOR ASSUMPTIONS.—If any person— "(A) in connection with the sale or exchange of property, assumes any debt instrument, or "(B) acquires any property subject to any debt instrument, in determining whether this section or section 483 applies to such debt instrument, such assumption (or such acquisition) shall not be taken into account unless the terms and conditions of such debt instrument are modified (or the nature of the transaction is changed) in connection with the assumption (or acquisition)." (c) TECHNICAL AMENDMENTS.—

98 Stat. 553. 26 USC 483.

Supra. Ante, p. 507. 98 Stat. 540.

98 St^? 58?' 26USe280G.

(1) Section 483 of such Code is amended by striking out subsection (e) and by redesignating subsections (f), (g), and (h) as subsections (e), (f), and (g), respectively. (2) Paragraph (1) of section 483(e) of such Code (as redesignated by paragraph (D) is amended by striking out "7 percent" and inserting in lieu thereof "6 percent". (3) Subsection (g) of section 483 of such Code (as redesignated by paragraph (1)) is amended to read as follows: "(g) CROSS REFERENCES.— "(1) For treatment of assumptions, see section 1274(c)(4). "(2) For special rules for certain transactions where stated principal amount does not exceed $2,800,000, see section 1274A. "(3) For special rules in case of the borrower under certain loans for personal use, see section 1275(b)."

^^^ Paragraph (4) of section 280G(d) of such Code is amended by striking out "in accordance with section 1274(b)(2)" and

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