# 26 U.S.C. § 1275: Other definitions and special rules Source: OLRC release point 119-134 . Cite pinpoints as 26 U.S.C. § 1275(a)(1). ## § 1275(a) Definitions For purposes of this subpart— **§ 1275(a)(1) Debt instrument.** **§ 1275(a)(1)(A) In general.** Except as provided in subparagraph (B), the term “debt instrument” means a bond, debenture, note, or certificate or other evidence of indebtedness. **§ 1275(a)(1)(B) Exception for certain annuity contracts.** The term “debt instrument” shall not include any annuity contract to which section 72 applies and which— **§ 1275(a)(1)(B)(i)** depends (in whole or in substantial part) on the life expectancy of 1 or more individuals, or **§ 1275(a)(1)(B)(ii)** is issued by an insurance company subject to tax under subchapter L (or by an entity described in section 501(c) and exempt from tax under section 501(a) which would be subject to tax under subchapter L were it not so exempt)— **§ 1275(a)(1)(B)(ii)(I)** in a transaction in which there is no consideration other than cash or another annuity contract meeting the requirements of this clause, **§ 1275(a)(1)(B)(ii)(II)** pursuant to the exercise of an election under an insurance contract by a beneficiary thereof on the death of the insured party under such contract, or **§ 1275(a)(1)(B)(ii)(III)** in a transaction involving a qualified pension or employee benefit plan. **§ 1275(a)(2) Issue date.** **§ 1275(a)(2)(A) Publicly offered debt instruments.** In the case of any debt instrument which is publicly offered, the term “date of original issue” means the date on which the issue was first issued to the public. **§ 1275(a)(2)(B) Issues not publicly offered and not issued for property.** In the case of any debt instrument to which section 1273(b)(2) applies, the term “date of original issue” means the date on which the debt instrument was sold by the issuer. **§ 1275(a)(2)(C) Other debt instruments.** In the case of any debt instrument not described in subparagraph (A) or (B), the term “date of original issue” means the date on which the debt instrument was issued in a sale or exchange. **§ 1275(a)(3) Tax-exempt obligation.** The term “tax-exempt obligation” means any obligation if— **§ 1275(a)(3)(A)** the interest on such obligation is not includible in gross income under section 103, or **§ 1275(a)(3)(B)** the interest on such obligation is exempt from tax (without regard to the identity of the holder) under any other provision of law. **§ 1275(a)(4) Treatment of obligations distributed by corporations.** Any debt obligation of a corporation distributed by such corporation with respect to its stock shall be treated as if it had been issued by such corporation for property. ## § 1275(b) Treatment of borrower in the case of certain loans for personal use **§ 1275(b)(1) Sections 1274 and 483 not to apply.** In the case of the obligor under any debt instrument given in consideration for the sale or exchange of property, sections 1274 and 483 shall not apply if such property is personal use property. **§ 1275(b)(2) Original issue discount deducted on cash basis in certain cases.** In the case of any debt instrument, if— **§ 1275(b)(2)(A)** such instrument— **§ 1275(b)(2)(A)(i)** is incurred in connection with the acquisition or carrying of personal use property, and **§ 1275(b)(2)(A)(ii)** has original issue discount (determined after the application of paragraph (1)), and **§ 1275(b)(2)(B)** the obligor under such instrument uses the cash receipts and disbursements method of accounting, notwithstanding section 163(e), the original issue discount on such instrument shall be deductible only when paid. **§ 1275(b)(3) Personal use property.** For purposes of this subsection, the term “personal use property” means any property substantially all of the use of which by the taxpayer is not in connection with a trade or business of the taxpayer or an activity described in section 212. The determination of whether property is described in the preceding sentence shall be made as of the time of issuance of the debt instrument. ## § 1275(c) Information requirements **§ 1275(c)(1) Information required to be set forth on instrument.** **§ 1275(c)(1)(A) In general.** In the case of any debt instrument having original issue discount, the Secretary may by regulations require that— **§ 1275(c)(1)(A)(i)** the amount of the original issue discount, and **§ 1275(c)(1)(A)(ii)** the issue date, be set forth on such instrument. **§ 1275(c)(1)(B) Special rule for instruments not publicly offered.** In the case of any issue of debt instruments not publicly offered, the regulations prescribed under subparagraph (A) shall not require the information to be set forth on the debt instrument before any disposition of such instrument by the first buyer. **§ 1275(c)(2) Information required to be submitted to Secretary.** In the case of any issue of publicly offered debt instruments having original issue discount, the issuer shall (at such time and in such manner as the Secretary shall by regulation prescribe) furnish the Secretary the following information: **§ 1275(c)(2)(A)** The amount of the original issue discount. **§ 1275(c)(2)(B)** The issue date. **§ 1275(c)(2)(C)** Such other information with respect to the issue as the Secretary may by regulations require. For purposes of the preceding sentence, any person who makes a public offering of stripped bonds (or stripped coupons) shall be treated as the issuer of a publicly offered debt instrument having original issue discount. **§ 1275(c)(3) Exceptions.** This subsection shall not apply to any obligation referred to in section 1272(a)(2) (relating to exceptions from current inclusion of original issue discount). **§ 1275(c)(4) Cross reference.** For civil penalty for failure to meet requirements of this subsection, see section 6706. ## § 1275(d) Regulation authority The Secretary may prescribe regulations providing that where, by reason of varying rates of interest, put or call options, indefinite maturities, contingent payments, assumptions of debt instruments, or other circumstances, the tax treatment under this subpart (or section 163(e)) does not carry out the purposes of this subpart (or section 163(e)), such treatment shall be modified to the extent appropriate to carry out the purposes of this subpart (or section 163(e)). ## Regulations - [Treas. Reg. § 1.1275-1](/26/reg/1.1275-1.md): Definitions. (interprets § 1275) - [Treas. Reg. § 1.1275-2](/26/reg/1.1275-2.md): Special rules relating to debt instruments. (interprets § 1275) - [Treas. Reg. § 1.1275-3](/26/reg/1.1275-3.md): OID information reporting requirements. (interprets § 1275) - [Treas. Reg. § 1.1275-4](/26/reg/1.1275-4.md): Contingent payment debt instruments. (interprets § 1275) - [Treas. Reg. § 1.1275-5](/26/reg/1.1275-5.md): Variable rate debt instruments. (interprets § 1275) - [Treas. Reg. § 1.1275-6](/26/reg/1.1275-6.md): Integration of qualifying debt instruments. (interprets § 1275) - [Treas. Reg. § 1.1275-7](/26/reg/1.1275-7.md): Inflation-indexed debt instruments. (interprets § 1275) ## Forms named in the regulations - [Form 8281](https://www.irs.gov/pub/irs-pdf/f8281.pdf) ## Final rules - [90 FR 53144](https://www.federalregister.gov/documents/2025/11/24/2025-20721/excise-tax-on-repurchase-of-corporate-stock) (2025): Excise Tax on Repurchase of Corporate Stock - [86 FR 810](https://www.federalregister.gov/documents/2021/01/06/2020-28653/taxable-year-of-income-inclusion-under-an-accrual-method-of-accounting-and-advance-payments-for) (2021): Taxable Year of Income Inclusion Under an Accrual Method of Accounting and Advance Payments for Goods, Services, and Other Items - [84 FR 59297](https://www.federalregister.gov/documents/2019/11/04/2019-23817/removal-of-section-385-documentation-regulations) (2019): Removal of Section 385 Documentation Regulations - [81 FR 72858](https://www.federalregister.gov/documents/2016/10/21/2016-25105/treatment-of-certain-interests-in-corporations-as-stock-or-indebtedness) (2016): Treatment of Certain Interests in Corporations as Stock or Indebtedness - [78 FR 23116](https://www.federalregister.gov/documents/2013/04/18/2013-09085/basis-reporting-by-securities-brokers-and-basis-determination-for-debt-instruments-and-options) (2013): Basis Reporting by Securities Brokers and Basis Determination for Debt Instruments and Options; Reporting for Premium - [78 FR 7997](https://www.federalregister.gov/documents/2013/02/05/2013-02259/noncompensatory-partnership-options) (2013): Noncompensatory Partnership Options - [78 FR 666](https://www.federalregister.gov/documents/2013/01/04/2012-31747/treasury-inflation-protected-securities-issued-at-a-premium-bond-premium-carryforward) (2013): Treasury Inflation-Protected Securities Issued at a Premium; Bond Premium Carryforward - [77 FR 56533](https://www.federalregister.gov/documents/2012/09/13/2012-22526/property-traded-on-an-established-market) (2012): Property Traded on an Established Market - [69 FR 52816](https://www.federalregister.gov/documents/2004/08/30/04-19642/guidance-regarding-the-treatment-of-certain-contingent-payment-debt-instruments-with-one-or-more) (2004): Guidance Regarding the Treatment of Certain Contingent Payment Debt Instruments With One or More Payments That Are Denominated in, or Determined by Reference to, a Nonfunctional Currency - [67 FR 30547](https://www.federalregister.gov/documents/2002/05/07/02-11035/debt-instruments-with-original-issue-discount-annuity-contracts) (2002): Debt Instruments With Original Issue Discount; Annuity Contracts - [66 FR 2811](https://www.federalregister.gov/documents/2001/01/12/01-622/reopenings-of-treasury-securities-and-other-debt-instruments-original-issue-discount) (2001): Reopenings of Treasury Securities and Other Debt Instruments; Original Issue Discount - [64 FR 48545](https://www.federalregister.gov/documents/1999/09/07/99-23082/inflation-indexed-debt-instruments) (1999): Inflation-Indexed Debt Instruments - [63 FR 1054](https://www.federalregister.gov/documents/1998/01/08/98-20/debt-instruments-with-original-issue-discount-annuity-contracts) (1998): Debt Instruments With Original Issue Discount; Annuity Contracts - [62 FR 68173](https://www.federalregister.gov/documents/1997/12/31/97-33647/amortizable-bond-premium) (1997): Amortizable Bond Premium - [61 FR 30133](https://www.federalregister.gov/documents/1996/06/14/96-14918/debt-instruments-with-original-issue-discount-contingent-payments-anti-abuse-rule) (1996): Debt Instruments With Original Issue Discount; Contingent Payments; Anti-Abuse Rule ## Leading cases - [Womack v. Commissioner, 510 F.3d 1295 (11th Cir. 2007)](https://www.courtlistener.com/opinion/77887/womack-v-commissioner-of-irs/) ## Proposed regulations (not in force) - [Prop. Treas. Reg. § 1.1275-7](/26/prop/1.1275-7_96-33397.md): Inflation-indexed debt instruments. (REG-242996-96, proposed 1997-01-06) - [Prop. Treas. Reg. § 1.1275-2](/26/prop/1.1275-2_04-19479.md): Special rules relating to debt instruments. (REG-108637-03, proposed 2004-08-25) - [Prop. Treas. Reg. § 1.1275-2](/26/prop/1.1275-2_2019-22042.md): Special rules relating to debt instruments. (REG-118784-18, proposed 2019-10-09) ## Connections Cites: § 72 Annuities; certain proceeds of endowment and life insurance contracts; § 103 Interest on State and local bonds; § 163 Interest; § 212 Expenses for production of income; § 501 Exemption from tax on corporations, certain trusts, etc.; § 1272 Current inclusion in income of original issue discount; § 1273 Determination of amount of original issue discount; § 6706 Original issue discount information requirements Cited by: § 108 Income from discharge of indebtedness; § 163 Interest; § 453A Special rules for nondealers; § 483 Interest on certain deferred payments; § 856 Definition of real estate investment trust; § 1278 Definitions and special rules; § 1283 Definitions and special rules; § 1286 Tax treatment of stripped bonds; § 1288 Treatment of original issue discount on tax-exempt obligations; § 6706 Original issue discount information requirements ## Amendments - 1984-07-18: [Pub. L. 98-369](/26/act/98-369.md), 98 Stat. 540 - 1986-10-22: [Pub. L. 99-514](/26/act/99-514.md), 100 Stat. 2805 - 1988-11-10: [Pub. L. 100-647](/26/act/100-647.md), 102 Stat. 3427 - 1990-11-05: [Pub. L. 101-508](/26/act/101-508.md), 104 Stat. 1388 - 2000-12-21: [Pub. L. 106-554](/26/act/106-554.md), 114 Stat. 2763