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Treasury Regulations · 26 CFR

§ 1.1286-1. Tax treatment of certain stripped bonds and stripped coupons.

In effect eCFR current as of October 15, 2026

Regulation text, no changes From the eCFR, current as of October 15, 2026. The eCFR is an authoritative but unofficial editorial compilation of the Code of Federal Regulations; the official text is the annual CFR on govinfo. Compare it with this section on ecfr.gov (external site) or the official annual CFR on govinfo (external site).

Regulation under 26 U.S.C. § 1286

Cite as 26 CFR § 1.1286-1

At a glance

Read from the text and its source citation. Not part of the regulation.

Status
In the current eCFR
Issued
December 29, 1992 by T.D. 8463
Issued under
26 U.S.C. § 1286
Length
311 words · about 1 min to read
Cross-references
cites 2 Code sections and 0 regulations; cited by 0
(a) De minimis OID. If the original issue discount determined under section 1286(a) with respect to the purchase of a stripped bond or stripped coupon is less than the amount computed under subparagraphs (A) and (B) of section 1273(a)(3) and the regulations thereunder, then the amount of original issue discount with respect to that purchase (other than any tax-exempt portion thereof, determined under section 1286(d)(2)) shall be considered to be zero. For purposes of this computation, the number of complete years to maturity is measured from the date the stripped bond or stripped coupon is purchased.
(b) Treatment of certain stripped bonds as market discount bonds—
(1) In general. By publication in the Internal Revenue Bulletin (see § 601.601(d)(2)(ii)(b) of the Statement of Procedural Rules), the Internal Revenue Service may (subject to the limitation of paragraph (b)(2) of this section) provide that certain mortgage loans that are stripped bonds are to be treated as market discount bonds under section 1278. Thus, any purchaser of such a bond is to account for any discount on the bond as market discount rather than original issue discount.
(2) Limitation. This treatment may be provided for a stripped bond only if, immediately after the most recent disposition referred to in section 1286(b)—
(i) The amount of original issue discount with respect to the stripped bond is determined under paragraph (a) of this section (concerning de minimis OID); or
(ii) The annual stated rate of interest payable on the stripped bond is no more than 100 basis points lower than the annual stated rate of interest payable on the original bond from which it and any other stripped bond or bonds and any stripped coupon or coupons were stripped.
(c) Effective date. This section is effective on and after August 8, 1991.

[T.D. 8463, 57 FR 61812, Dec. 29, 1992]

Other regulations under § 1286

Cross-references

Computed from the citations in the text of 26 CFR.

Code sections it cites

Amendment history

From the source citation at the end of the section, newest first. T.D. is a Treasury decision; FR is the Federal Register.

  1. Issued by T.D. 8463 (57 FR 61812)

Where it sits in 26 CFR

  1. Subchapter A Income tax
  2. Part 1 Income taxes
  3. Special Rules for Determining Capital Gains and Losses

Nearby sections