Treasury Regulations · 26 CFR
§ 1.242-1. Deduction for partially tax-exempt interest.
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. § 242
Cite as 26 CFR § 1.242-1
At a glance
Read from the text and its source citation. Not part of the regulation.
- Status
- In the current eCFR
- Issued
- March 20, 1971 by T.D. 7100
- Issued under
- 26 U.S.C. § 242
- Length
- 126 words · about 1 min to read
- Cross-references
- cites 1 Code section and 0 regulations; cited by 0
A corporation is allowed a deduction under section 242(a) in an amount equal to certain interest received on obligations of the United States, or an obligation of corporations organized under Acts of Congress which are instrumentalities of the United States. The interest for which a deduction shall be allowed is interest which is included in gross income and which is exempt from normal tax under the act, as amended and supplemented, which authorized the issuance of the obligations. The deduction allowed by section 242(a) is allowed only for the purpose of computing normal tax, and therefore, no deduction is allowed for such interest in the computation of any surtax imposed by Subtitle A of the Internal Revenue Code of 1954.
[T.D. 7100, 36 FR 5333, Mar. 20, 1971]
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.
- Issued by T.D. 7100 (36 FR 5333)
Where it sits in 26 CFR
- Subchapter A Income tax
- Part 1 Income taxes
- Special Deductions for Corporations