# Prop. Treas. Reg. § 1.1287-1: Denial of capital gains treatment for gains on registration-required obligations not in registered form.

Proposed regulation, not in force. REG-125374-16, 82 FR 43720, published 2017-09-19 <https://www.federalregister.gov/documents/2017/09/19/2017-19753/guidance-on-the-definition-of-registered-form>. Interprets 26 U.S.C. § 1287.

Par. 8. Section 1.881-3(e) is amended by: 1. Removing Examples 10 and 19. 2. Redesignating Examples 11 through 18 as Examples 10 through 17 and Examples 20 through 26 as Examples 18 through 24. Par. 9. Section 1.1287-1 is amended by: 1. Revising paragraph (a). 2. Redesignating paragraphs (b)(1) and (2) as (b)(2) and (3), respectively. 3. Adding a new paragraph (b)(1). 4. Revising the paragraph heading and first sentence of newly redesignated paragraph (b)(2). 5. Redesignating paragraph (d) as paragraph (d)(1). 6. Revising the paragraph heading and the first sentence of newly redesignated paragraph (d)(1). 7. Adding a new paragraph heading for paragraph (d). 8. Adding paragraph (d)(2). The revisions and additions read as follows:

(a) In general. Except as provided in paragraph (c) of this section, any gain on the sale or other disposition of a registration-required obligation held after December 31, 1982, that is not in registered form shall be treated as ordinary income unless the issuance of the obligation was subject to tax under section 4701. The term registration-required obligation has the meaning given to that term in section 163(f)(2) and § 1.163-5(a)(2)(i). The term holder means the person that would be denied a loss deduction under section 165(j)(1) or denied capital gain treatment under section 1287(a).

(b) Registered form —(1) Obligations issued after March 18, 2012. With respect to obligations issued after March 18, 2012, the term registered form has the meaning given that term in § 1.163-5(b).

(2) Obligations issued after September 21, 1984 and on or before March 18, 2012. With respect to any obligation originally issued after September 21, 1984, and on or before March 18, 2012, the term registered form has the meaning given that term in § 5f.103-1 of this chapter. * * *

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(d) Applicability date —(1) In general. Except as provided in paragraph (d)(2) of this section, these regulations apply generally to obligations issued after January 20, 1987. * * *

(2) Obligations issued after March 18, 2012. Paragraph (a) of this section applies to obligations issued after March 18, 2012.