# Prop. Treas. Reg. § 1.863-7: Allocation of income attributable to certain notional principal contracts under section 863(a).

Proposed regulation, not in force. REG-111283-11, 76 FR 57684, published 2011-09-16 <https://www.federalregister.gov/documents/2011/09/16/2011-23665/swap-exclusion-for-section-1256-contracts>. Interprets 26 U.S.C. § 863.

Par. 4. Section 1.863-7 is amended by: 1. Revising the third sentence and removing the fourth sentence of paragraph (a)(1). 2. Adding two sentences to the end of paragraph (a)(2). The revision and addition read as follows:

(a) Scope —(1) Introduction. * * * Notional principal contract income is income attributable to a notional principal contract as defined in § 1.446-3(c). * * *

(2) * * * The rules of this section apply to notional principal contracts as defined in § 1.446-3(c) that are entered into on or after the date of publication of a Treasury decision adopting these rules as final regulations in the Federal Register . Section 1.863-7 as contained in 26 CFR part 1 revised April 1, 2011, continues to apply to notional principal contracts entered into before the date of publication of a Treasury decision adopting these rules as final regulations in the Federal Register .

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