§1288. Treatment of original issue discount on tax-exempt obligations
26 U.S.C. § 1288
for purposes of section 163, in the manner provided by section 1272(a) (determined without regard to paragraph (7) thereof), and
for purposes of determining the adjusted basis of the holder, in the manner provided by section 1272(a) (determined with regard to paragraph (7) thereof).
Definitions and special rules— For purposes of this section—
Original issue discount— The term “original issue discount” has the meaning given to such term by section 1273(a) without regard to paragraph (3) thereof. In applying section 483 or 1274, under regulations prescribed by the Secretary, appropriate adjustments shall be made to the applicable Federal rate to take into account the tax exemption for interest on the obligation.
Tax-exempt obligation— The term “tax-exempt obligation” has the meaning given to such term by section 1275(a)(3).
Short-term obligations— In applying this section to obligations with maturity of 1 year or less, rules similar to the rules of section 1283(b) shall apply.
Notes, amendments, and revision history
(Added Pub. L. 98–369, div. A, title I, § 41(a), July 18, 1984, 98 Stat. 553; amended Pub. L. 100–647, title I, § 1006(u)(3), Nov. 10, 1988, 102 Stat. 3427.)
Editorial Notes
Amendments
1988—Subsec. (a). Pub. L. 100–647 substituted “paragraph (7)” for “paragraph (6)” in pars. (1) and (2).
Statutory Notes and Related Subsidiaries
Effective Date of 1988 Amendment
Amendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.
Effective Date
Section applicable to taxable years ending after July 18, 1984, and applicable to obligations issued after Sept. 3, 1982, and acquired after Mar. 1, 1984, see section 44 of Pub. L. 98–369, set out as a note under section 1271 of this title.