# Prop. Treas. Reg. § 1.162-30: Notional principal contract payments.

Proposed regulation, not in force. REG-100420-03, 69 FR 8886, published 2004-02-26 <https://www.federalregister.gov/documents/2004/02/26/04-4151/national-principal-contracts-contingent-nonperiodic-payments>. Interprets 26 U.S.C. § 162.

Par. 2. Section 1.162-30 is added to read as follows:

(a) In general. Amounts taken into account by a taxpayer pursuant to § 1.446-3(d)(1) (including mark-to-market deductions) with respect to a notional principal contract as defined in § 1.446-3(c)(1)(i), are deductible as ordinary and necessary business expenses. However, this section will not apply to any amount representing interest expense on the deemed loan component of a significant nonperiodic payment as described in § 1.446-3(g)(4). For any loss arising from a termination payment as defined in § 1.446-3(h)(1), see section 1234A and the regulations thereunder. For the timing of deductions with respect to notional principal contracts, see § 1.446-3.

(b) Effective date. Paragraph (a) of this section is applicable to notional principal contracts entered into on or after 30 days after the date a Treasury decision based on these proposed regulations is published in the Federal Register .