§1273 — Determination of amount of original issue discount
14 cases·14 cited
Statute Text — 26 U.S.C. §1273
For purposes of this subpart—
The term “original issue discount” means the excess (if any) of—
the stated redemption price at maturity, over
the issue price.
The term “stated redemption price at maturity” means the amount fixed by the last modification of the purchase agreement and includes interest and other amounts payable at that time (other than any interest based on a fixed rate, and payable unconditionally at fixed periodic intervals of 1 year or less during the entire term of the debt instrument).
If the original issue discount determined under paragraph (1) is less than—
¼ of 1 percent of the stated redemption price at maturity, multiplied by
the number of complete years to maturity,
then the original issue discount shall be treated as zero.
For purposes of this subpart—
In the case of any issue of debt instruments—
publicly offered, and
not issued for property,
the issue price is the initial offering price to the public (excluding bond houses and brokers) at which price a substantial amount of such debt instruments was sold.
In the case of any issue of debt instruments not issued for property and not publicly offered, the issue price of each such instrument is the price paid by the first buyer of such debt instrument.
In the case of a debt instrument which is issued for property and which—
is part of an issue a portion of which is traded on an established securities market, or
is issued for stock or securities which are traded on an established securities market, or
to the extent provided in regulations, is issued for property (other than stock or securities) of a kind regularly traded on an established market,
the issue price of such debt instrument shall be the fair market value of such property.
Except in any case—
to which paragraph (1), (2), or (3) of this subsection applies, or
to which section 1274 applies,
the issue price of a debt instrument which is issued for property shall be the stated redemption price at maturity.
In applying this subsection, the term “property” includes services and the right to use property, but such term does not include money.
For purposes of subsection (b)—
The terms “initial offering price” and “price paid by the first buyer” include the aggregate payments made by the purchaser under the purchase agreement, including modifications thereof.
In the case of any debt instrument and an option, security, or other property issued together as an investment unit—
the issue price for such unit shall be determined in accordance with the rules of this subsection and subsection (b) as if it were a debt instrument,
the issue price determined for such unit shall be allocated to each element of such unit on the basis of the relationship of the fair market value of such element to the fair market value of all elements in such unit, and
the issue price of any debt instrument included in such unit shall be the portion of the issue price of the unit allocated to the debt instrument under subparagraph (B).
Treasury Regulations
- Treas. Reg. §Treas. Reg. §1.1273-1 Definition of OID
- Treas. Reg. §Treas. Reg. §1.1273-1(a) In general.
- Treas. Reg. §Treas. Reg. §1.1273-1(b) Stated redemption price at maturity.
- Treas. Reg. §Treas. Reg. §1.1273-1(c) Qualified stated interest—(1) Definition—(i) In general.
- Treas. Reg. §Treas. Reg. §1.1273-1(d) De minimis OID—(1) In general.
- Treas. Reg. §Treas. Reg. §1.1273-1(e) Definitions—(1) Installment obligation.
- Treas. Reg. §Treas. Reg. §1.1273-1(f) Examples.
- Treas. Reg. §Treas. Reg. §1.1273-1(i) §1.1273-1(i)
- Treas. Reg. §Treas. Reg. §1.1273-2 Determination of issue price and issue date
- Treas. Reg. §Treas. Reg. §1.1273-2(a) Debt instruments issued for money—(1) Issue price.
- Treas. Reg. §Treas. Reg. §1.1273-2(b) Publicly traded debt instruments issued for property—(1) Issue price.
- Treas. Reg. §Treas. Reg. §1.1273-2(c) Debt instruments issued for publicly traded property—(1) Issue price.
- Treas. Reg. §Treas. Reg. §1.1273-2(d) Other debt instruments—(1) Issue price.
- Treas. Reg. §Treas. Reg. §1.1273-2(e) Special rule for certain sales to bond houses, brokers, or similar persons.
- Treas. Reg. §Treas. Reg. §1.1273-2(f) Traded on an established market (publicly traded)—(1) In general.
- Treas. Reg. §Treas. Reg. §1.1273-2(g) Treatment of certain cash payments incident to lending transactions—(1) Applicability.
- Treas. Reg. §Treas. Reg. §1.1273-2(h) Investment units—(1) In general.
- Treas. Reg. §Treas. Reg. §1.1273-2(i) §1.1273-2(i)
- Treas. Reg. §Treas. Reg. §1.1273-2(j) Convertible debt instruments.
- Treas. Reg. §Treas. Reg. §1.1273-2(k) Below-market loans subject to section 7872(b).
- Treas. Reg. §Treas. Reg. §1.1273-2(l) §1.1273-2(l)
- Treas. Reg. §Treas. Reg. §1.1273-2(m) Treatment of amounts representing pre-issuance accrued interest—(1) Applicability.
14 Citing Cases
1273.4 (2016) (providing that employ- ees are to be on administrative leave during a state ofemergency); 4 sec. 1299.1 (defining "administrative leave" as an excused absence from duty without loss of pay and without charge to annual leave, sick leave, or compensatory time). - 23 - emergency days as declared by the Mayor"). This implies that "
1273; United States v. Midland-Ross Corp., 381 U.S. 54, 85 (1965); and John Hancock Life Ins. Co. (U.S.A.) v. Commissioner, 141 T.C. at 147. "The holder ofa debt instrument with OID generally accrues and includes in gross income, as interest, the OID over the life ofthe obligation, even though the interest may not be received until the maturit
1273; United States v. Midland-Ross Corp., 381 U.S. 54, 85 (1965); and John Hancock Life Ins. Co. (U.S.A.) v. Commissioner, 141 T.C. at 147. "The holder ofa debt instrument with OID generally accrues and includes in gross income, as interest, the OID over the life ofthe obligation, even though the interest may not be received until the maturit
A foreign corporation not engaged in a trade or business within the United States is taxable at a flat rate of 30 percent of the amount received from “interest (other than original issue discount as defined in section 1273), dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, and other fixed or determinable annual or periodical gains, profits, and income”, but only to the extent that the income is received from sources within the United States (U.S.
t of Guam, American Samoa, and the Northern Mariana Islands”. TRA 1986 section 1271, see supra note 12, does not appear in, or make any changes to, the Internal Revenue Code (Code). Rather, that provision grants Guam, American Samoa, and 16TRA 1986 sec. 1273, in pt. I of subtit. G of tit. XII, relates to the treatment of corporations organized in Guam, American Samoa, and the CNMI. TRA 1986 secs. 1274 and 1275, in pt. II of subtit. G, relate specifically to the Virgin Islands. TRA 1986 sec. 1276
t of Guam, American Samoa, and the Northern Mariana Islands”. TRA 1986 section 1271, see supra note 12, does not appear in, or make any changes to, the Internal Revenue Code (Code). Rather, that provision grants Guam, American Samoa, and 16TRA 1986 sec. 1273, in pt. I of subtit. G of tit. XII, relates to the treatment of corporations organized in Guam, American Samoa, and the CNMI. TRA 1986 secs. 1274 and 1275, in pt. II of subtit. G, relate specifically to the Virgin Islands. TRA 1986 sec. 1276
ribed by the Secretary under section 874) deduct and withhold from such items a tax equal to 30 percent thereof * * * (b) Income items.--The items of income referred to in subsection (a) are interest (other than original issue discount as defined in section 1273), dividends, rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable annual or periodical gains, profits, and income * * * - 145 - SEC.
Under the second regime, a flat tax of 30 percent is imposed on a foreign corporation’s gross income from "interest (other than original issue discount as defined in section 1273), dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, and other fixed or determinable annual or periodical gains, profits, and income", but only to the extent the amount is received from sources within the United States and is not effectively connected with the conduct of tr
Under the second regime, a flat tax of 30 percent is imposed on a foreign corporation’s gross income from "interest (other than original issue discount as defined in section 1273), dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, and other fixed or determinable annual or periodical gains, profits, and income", but only to the extent the amount is received from sources within the United States and is not effectively connected with the conduct of tr
ribed by the Secretary under section 874) deduct and withhold from such items a tax equal to 30 percent thereof * * * (b) Income items.--The items of income referred to in subsection (a) are interest (other than original issue discount as defined in section 1273), dividends, rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable annual or periodical gains, profits, and income * * * - 145 - SEC.
ribed by the Secretary under section 874) deduct and withhold from such items a tax equal to 30 percent thereof * * * (b) Income items.--The items of income referred to in subsection (a) are interest (other than original issue discount as defined in section 1273), dividends, rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable annual or periodical gains, profits, and income * * * - 145 - SEC.
ribed by the Secretary under section 874) deduct and withhold from such items a tax equal to 30 percent thereof * * * (b) Income items.--The items of income referred to in subsection (a) are interest (other than original issue discount as defined in section 1273), dividends, rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable annual or periodical gains, profits, and income * * * - 145 - SEC.