Cases: National Can Corp. v. United States, 687 F.2d 1107 (7th Cir. 1982); Clark Equipment Co. v. United States, 912 F.2d 113 (6th Cir. 1990)
Final rules 3
(a) General rule 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.
Amended 1976, 2012, 2014
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 220(i), substituted “1563(a)(1))” for “1563(a)(1)”.
- 2012 Pub. L. 112-95 Pub. L. 112–95, § 1108(a), substituted “, or a corporation in the same parent-subsidiary controlled group (within the meaning of section 1563(a)(1) as” for “, or a corporation in control of, or controlled by,”.
- 1976 Pub. L. 94-455 Pub. L. 94–455 struck out “or his delegate” after “Secretary”.
Cited by 1
(b) Adjusted issue price 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.
Amended 1984, 2012, 2014
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 221(a)(43), which directed amendment of subsec. (b)(1) by striking out “, in the case of bonds or other evidences of indebtedness issued after February 28, 1913,” after “repurchase, or”, was executed by making the amendment in subsec. (b) to reflect the probable intent of Congress and the prior amendment by Pub. L. 112–95, § 1108(b). See 2012 Amendment note below.
- 2012 Pub. L. 112-95 Pub. L. 112–95, § 1108(b), substituted “Adjusted issue price” for “Special rules” in heading and “For purposes of subsection (a),” for “For purposes of subsection (a)—” and par. (1) designation and heading, and “the adjusted issue price” for “The adjusted issue price”, and struck out par. (2), which defined “control” as having the meaning assigned to such term by section 368(c).
- 1984 Pub. L. 98-369 Pub. L. 98–369 substituted “sections 1273(b) and 1274” for “section 1232(b)”.