§249 — Limitation on deduction of bond premium on repurchase
15 cases·15 cited
Statute Text — 26 U.S.C. §249
No deduction shall be allowed to the issuing corporation for any premium paid or incurred upon the repurchase of a bond, debenture, note, or certificate or other evidence of indebtedness which is convertible into the stock of the issuing corporation, or a corporation in the same parent-subsidiary controlled group (within the meaning of section 1563(a)(1)) as the issuing corporation, to the extent the repurchase price exceeds an amount equal to the adjusted issue price plus a normal call premium on bonds or other evidences of indebtedness which are not convertible. The preceding sentence shall not apply to the extent that the corporation can demonstrate to the satisfaction of the Secretary that such excess is attributable to the cost of borrowing and is not attributable to the conversion feature.
For purposes of subsection (a), the adjusted issue price is the issue price (as defined in sections 1273(b) and 1274) increased by any amount of discount deducted before repurchase, or decreased by any amount of premium included in gross income before repurchase by the issuing corporation.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §1.249-1 Limitation on deduction of bond premium on repurchase
- Treas. Reg. §Treas. Reg. §1.249-1(a) Limitation—(1) General rule.
- Treas. Reg. §Treas. Reg. §1.249-1(b) Obligations—(1) Definition.
- Treas. Reg. §Treas. Reg. §1.249-1(c) Repurchase premium.
- Treas. Reg. §Treas. Reg. §1.249-1(d) Normal call premium—(1) In general.
- Treas. Reg. §Treas. Reg. §1.249-1(e) Exception—(1) In general.
- Treas. Reg. §Treas. Reg. §1.249-1(f) Effective/applicability dates—(1) In general.
- Treas. Reg. §Treas. Reg. §1.249-1(g) Example.
15 Citing Cases
n reflection, we regard it as evidence of a verbal act, or proof of an act of independent legal significance--here the agreement between H. and Segal to extend the 30-day period to provide updated financial information. See 2 McCormick on Evidence, sec. 249 (6th ed. 2000 (continued...) - 7 - June 19 letter obliquely refers to the oral agreement to extend the 30-day deadline: "[e]nclosed as promised, are the [financial information forms)." (Emphasis added.) Segal also credibly testified that he a
the close of his taxable year, is not a surviving spouse (as defined in subsection (a)), and either-- (A) maintains as his home a household which constitutes for more than one-half of such taxable year the principal place of abode, as a member of such household, of-- (i) a qualifying child of the individual (as defined in section 152(c), determined without regard to se
, in effect, be the equivalent of allowing a loss to which Metals was not entitled on the conversion, under section 1032, albeit as a capital loss rather than an ordinary loss, or the equivalent of a bond premium amortization deduction disallowed by section 249. We are not prepared to accept such an eccentric result. See Darby v. Commissioner, 97 T.C. 51, 68 (1991). Petitioners assert that respondent has not pointed to any specific provision of the Internal Revenue Code that disallows the claime
, in effect, be the equivalent of allowing a loss to which Metals was not entitled on the conversion, under section 1032, albeit as a capital loss rather than an ordinary loss, or the equivalent of a bond premium amortization deduction disallowed by section 249. We are not prepared to accept such an eccentric result. See Darby v. Commissioner, 97 T.C. 51, 68 (1991). Petitioners assert that respondent has not pointed to any specific provision of the Internal Revenue Code that disallows the claime