§ 279(d)(3)

obligation not corporate acquisition indebtedness

UNDECIDED

0 of 2 settled

  1. 1

    § 279(d)(3)

    ALL OF
    “an obligation is determined to be corporate acquisition indebtedness as of the close of a taxable year of the issuing corporation in which clause (i) of subsection (c)(3)(A) applied” needs Step 2 corporate acquisition indebtedness UNDECIDED
    “would not be corporate acquisition indebtedness if the determination were made as of the close of the first taxable year of such corporation thereafter in which clause (ii) of subsection (c)(3)(A) could apply”
  2. 2

    § 279(b)

    corporate acquisition indebtedness

    ALL OF

    For purposes of this section, the term “corporate acquisition indebtedness” means any obligation evidenced by a bond, debenture, note, or certificate or other evidence of indebtedness issued by a corporation (hereinafter in this section referred to as “issuing corporation”) if—

    “any obligation evidenced by a bond, debenture, note, or certificate or other evidence of indebtedness issued by a corporation (hereinafter in this section referred to as “issuing corporation”)” Opening words
    “such obligation is issued to provide consideration for the acquisition of— stock in another corporation (hereinafter in this section referred to as “acquired corporation”), or assets of another corporation (hereinafter in this section referred to as “acquired corporation”) pursuant to a plan under which at least two-thirds (in value) of all the assets (excluding money) used in trades and businesses carried on by such corporation are acquired,” § 279(b)(1)
    “such obligation is either— subordinated to the claims of trade creditors of the issuing corporation generally, or expressly subordinated in right of payment to the payment of any substantial amount of unsecured indebtedness, whether outstanding or subsequently issued, of the issuing corporation,” § 279(b)(2)

    “Substantial amount of unsecured indebtedness” is defined in Reg. § 1.279-3(c)(2).

    “the bond or other evidence of indebtedness is either— convertible directly or indirectly into stock of the issuing corporation, or part of an investment unit or other arrangement which includes, in addition to such bond or other evidence of indebtedness, an option to acquire, directly or indirectly, stock in the issuing corporation, and” § 279(b)(3)
    “as of a day determined under subsection (c)(1), either— the ratio of debt to equity (as defined in subsection (c)(2)) of the issuing corporation exceeds 2 to 1, or the projected earnings (as defined in subsection (c)(3)) do not exceed 3 times the annual interest to be paid or incurred (determined under subsection (c)(4)).” § 279(b)(4)