# Prop. Treas. Reg. § 1.165-12: Denial of deduction for losses 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. § 165.

Par. 5. Section 1.165-12 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, nothing in section 165(a) and the regulations thereunder, or in any other provision of law, shall be construed to provide a deduction for any loss sustained on any registration-required obligation held after December 31, 1982, unless the obligation is in registered form or 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). For purposes of this section, 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). For purposes of this section, the term United States means the United States and its possessions within the meaning of § 1.163-5(c)(2)(iv).

(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. For the rules that apply to obligations issued on or before March 18, 2012, see § 1.165-12 as contained in 26 CFR part 1, revised as of the date of the most recent annual revision.