26 U.S.C. § 1288
§ 1288. Treatment of original issue discount on tax-exempt obligations
No plain-English explainer yet. Below is the official text. Explainers are being added section by section.
History
Added in 1984 by the Deficit Reduction Act of 1984. Last changed November 10, 1988 by the Technical and Miscellaneous Revenue Act of 1988.
Every change, newest first (2)
- November 10, 1988Technical and Miscellaneous Revenue Act of 1988
- July 18, 1984Deficit Reduction Act of 1984 · added this section
The law as written
Current through Public Law 119-102. Amendment notes omitted.
Original issue discount on any tax-exempt obligation shall be treated as accruing—
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).
For purposes of this section—
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.
The term “tax-exempt obligation” has the meaning given to such term by section 1275(a)(3).
In applying this section to obligations with maturity of 1 year or less, rules similar to the rules of section 1283(b) shall apply.