# Prop. Treas. Reg. § 1.1275-2: Special rules relating to debt instruments.

Proposed regulation, not in force. REG-118784-18, 84 FR 54068, published 2019-10-09 <https://www.federalregister.gov/documents/2019/10/09/2019-22042/guidance-on-the-transition-from-interbank-offered-rates-to-other-reference-rates>. Interprets 26 U.S.C. § 1275.

Par. 6. Section 1.1271-0 is amended by adding a reserved entry for § 1.1275-2(l) and by adding entries for § 1.1275-2(m) to read as follows:

Par. 7. Section 1.1275-2, as proposed to be amended at 84 FR 47210, September 9, 2019, is further amended by adding paragraph (m) to read as follows:

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(l) [Reserved]

(m) Transition from interbank offered rates.

(1) In general.

(2) Single qualified floating rate.

(3) Remote contingency.

(4) Change in circumstances.

(5) Applicability date.

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(m) Transition from interbank offered rates —(1) In general. This paragraph (m) applies to a variable rate debt instrument (as defined in § 1.1275-5(a)) that provides both for a qualified floating rate that references an interbank offered rate (IBOR) and for a methodology to change the IBOR-referencing rate to a different rate in anticipation of the IBOR becoming unavailable or unreliable. See § 1.1001-6 for additional rules that may apply to a debt instrument that provides for a rate referencing an IBOR.

(2) Single qualified floating rate. If a debt instrument is described in paragraph (m)(1) of this section, the IBOR-referencing rate and the different rate are treated as a single qualified floating rate for purposes of § 1.1275-5.

(3) Remote contingency. If a debt instrument is described in paragraph (m)(1) of this section, the possibility that the IBOR will become unavailable or unreliable is treated as a remote contingency for purposes of paragraph (h) of this section.

(4) Change in circumstances. If a debt instrument is described in paragraph (m)(1) of this section, the fact that the IBOR has become unavailable or unreliable is not treated as a change in circumstances for purposes of paragraph (h)(6) of this section.

(5) Applicability date. Paragraph (m) of this section applies to debt instruments issued on or after the date of publication of a Treasury decision adopting these rules as final regulations in the Federal Register . However, a taxpayer may apply paragraph (m) of this section to debt instruments issued before the date of publication of a Treasury decision adopting these rules as final regulations in the Federal Register . See section 7805(b)(7).