26 U.S.C. § 860B — Taxation of holders of regular interests
submitted 40 years ago by Pub. L. 99-514 to r/title-26-INTERNAL-REVENUE-CODE · 190 words · no verdicts yet
A regular interest in a REMIC is treated as debt for tax purposes and uses accrual accounting. Gain on disposing of the interest is ordinary income up to the specified excess amount.
(a) General rule. When this chapter’s tax is determined for a holder of a regular REMIC interest, the interest is treated as a debt instrument if it is not already one.
(b) Accrual method. Amounts included in gross income from a regular REMIC interest are determined using accrual accounting.
(c) Ordinary-income portion of gain. Gain from disposing of a regular interest* is ordinary income up to the excess, if any, of: (1) the amount that would have been included in the taxpayer’s gross income if the interest’s yield had been 110 percent of the applicable Federal rate at the start of the holding period, over (2) the amount actually included in gross income for the interest.
(d) Cross-reference. Section 1272(a)(6) contains special rules for including original issue discount on regular interests.
In determining the tax under this chapter of any holder of a regular interest* in a REMIC, such interest (if not otherwise a debt instrument) shall be treated as a debt instrument.
The amounts includible in gross income with respect to any regular interest in a REMIC shall be determined under the accrual method of accounting.
Gain on the disposition of a regular interest shall be treated as ordinary income to the extent such gain does not exceed the excess (if any) of—
the amount which would have been includible in the gross income of the taxpayer* with respect to such interest if the yield on such interest were 110 percent of the applicable Federal rate (as defined in section 1274(d) without regard to paragraph (2) thereof) as of the beginning of the taxpayer’s holding period, over
the amount actually includible in gross income with respect to such interest by the taxpayer.
For special rules in determining inclusion of original issue discount on regular interests, see section 1272(a)(6).
Source credit: (Added Pub. L. 99–514, title VI, § 671(a), Oct. 22, 1986, 100 Stat. 2309.)
- 1986Enacted · Pub. L. 99-514 · 100 Stat. 2309
A history note hasn’t been published yet. The record shows enactment by Pub. L. 99-514 on 1986-10-22.
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