Internal Revenue Code · 26 U.S.C.
§ 1273. Determination of amount of original issue discount
Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).
Cite as 26 U.S.C. § 1273
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Added
- July 18, 1984 by Pub. L. 98–369
- Last amended
- October 22, 1986 by Pub. L. 99–514
- Amendments
- 1 dated changes in the source credit
- Length
- 3 subsections · 616 words · about 3 min to read
- Defines
- 5 terms
- Cross-references
- cites 1; cited by 20 Code sections and 32 other regulations
- Regulations
- 2 issued under this section
The term “stated redemption price at maturity” means the amount fixed by the last modification of the purchase agreement and includes interest and other amounts payable at that time (other than any interest based on a fixed rate, and payable unconditionally at fixed periodic intervals of 1 year or less during the entire term of the debt instrument).
In the case of any issue of debt instruments not issued for property and not publicly offered, the issue price of each such instrument is the price paid by the first buyer of such debt instrument.
In applying this subsection, the term “property” includes services and the right to use property, but such term does not include money.
The terms “initial offering price” and “price paid by the first buyer” include the aggregate payments made by the purchaser under the purchase agreement, including modifications thereof.
(Added Pub. L. 98–369, div. A, title I, § 41(a), July 18, 1984, 98 Stat. 536; amended Pub. L. 99–514, title XVIII, § 1803(a)(10), Oct. 22, 1986, 100 Stat. 2794.)
Terms defined here
Where the text says “the term … means”. Select a term to jump to its definition.
Regulations under this section
Treasury regulations (26 CFR) issued under § 1273
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 1 other section
Cited by 20 Code sections
- § 108(e)(10)(B) Income from discharge of indebtedness
- § 143(g)(2)(C)(i) Mortgage revenue bonds: qualified mortgage bond and qualified veterans’ mortgage bond
- § 148(h) Arbitrage
- § 163(e)(2)(B) Interest
- § 249(b) Limitation on deduction of bond premium on repurchase
- § 305(c)(1) Distributions of stock and stock rights
- § 483(d)(1) Interest on certain deferred payments
- § 811(b)(3)(B) Accounting provisions
- § 834(d)(2)(B) Determination of taxable investment income
- § 860G(a)(10) Other definitions and special rules
- § 871(a)(1)(A) Tax on nonresident alien individuals
- § 881(a)(1) Tax on income of foreign corporations not connected with United States business
- § 1274(c)(3)(D) Determination of issue price in the case of certain debt instruments issued for property
- § 1275(a)(2)(B) Other definitions and special rules
- § 1283(a)(2)(A) Definitions and special rules
- § 1286(d)(4) Tax treatment of stripped bonds
- § 1288(b)(1) Treatment of original issue discount on tax-exempt obligations
- § 1351(h) Treatment of recoveries of foreign expropriation losses
- § 1441(b) Withholding of tax on nonresident aliens
- § 6049(b)(5)(B)(iii) Returns regarding payments of interest
Cited in 32 regulations not issued under it
- § 1.108-2 Acquisition of indebtedness by a person related to the debtor.
- § 1.148-1 Definitions and elections.
- § 1.148-5 Yield and valuation of investments.
- § 1.163-5 Denial of interest deduction on certain obligations issued after December 31, 1982, unless issued in registered form.
- § 1.163-7 Deduction for OID on certain debt instruments.
- § 1.163-12 Deduction of original issue discount on instrument held by related foreign person.
- § 1.221-1 Deduction for interest paid on qualified education loans after December 31, 2001.
- § 1.305-5 Distributions on preferred stock.
- § 1.382-2T Definition of ownership change under section 382, as amended by the Tax Reform Act of 1986 (temporary).
- § 1.385-1 General provisions.
- § 1.385-3 Certain distributions of debt instruments and similar transactions.
- § 1.469-7 Treatment of self-charged items of interest income and deduction.
- § 1.860G-1 Definition of regular and residual interests.
- § 1.884-4 Branch-level interest tax.
- § 1.988-2 Recognition and computation of exchange gain or loss.
- § 1.988-5 Section 988(d) hedging transactions.
- § 1.988-6 Nonfunctional currency contingent payment debt instruments.
- § 1.1001-1 Computation of gain or loss.
- § 1.1012-1 Basis of property.
- § 1.1272-2 Treatment of debt instruments purchased at a premium.
- § 1.1274-1 Debt instruments to which section 1274 applies.
- § 1.1275-1 Definitions.
- § 1.1275-2 Special rules relating to debt instruments.
- § 1.1275-4 Contingent payment debt instruments.
Show 8 more
- § 1.1286-1 Tax treatment of certain stripped bonds and stripped coupons.
- § 1.1367-2 Adjustments to basis of indebtedness to shareholder.
- § 1.1502-13 Intercompany transactions.
- § 1.6045-1 Returns of information of brokers and barter exchanges.
- § 1.6049-7 Returns of information with respect to REMIC regular interests and collateralized debt obligations.
- § 1.6049-10 Reporting of original issue discount on a tax-exempt obligation.
- § 35a.3406-2 Imposition of backup withholding for notified payee underreporting of reportable interest or dividend payments.
- § 46.4701-1 Tax on issuer of registration-required obligation not in registered form.
Amendment history
From the source credit and the official notes, newest first.
- Amended by Pub. L. 99–514Parts changed in 1986: (b)(3)(B)
- Added by Pub. L. 98–369
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 1 NORMAL TAXES AND SURTAXES
- Subchapter P Capital Gains and Losses
- Part V SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS
- Subpart A Original Issue Discount
Nearby sections
- § 1271 Treatment of amounts received on retirement or sale or exchange of debt instruments
- § 1272 Current inclusion in income of original issue discount
- § 1273 Determination of amount of original issue discount
- § 1274 Determination of issue price in the case of certain debt instruments issued for property
- § 1274A Special rules for certain transactions where stated principal amount does not exceed $2,800,000
- § 1275 Other definitions and special rules
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
Amendments
1986—Subsec. (b)(3)(B). Pub. L. 99–514 amended subpar. (B) generally, designating existing provisions as cl. (i) and adding cl. (ii).
Statutory Notes and Related Subsidiaries
Effective Date of 1986 Amendment
Amendment by Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.
Effective Date
Section applicable to taxable years ending after July 18, 1984, except as otherwise provided, see section 44 of Pub. L. 98–369, set out as a note under section 1271 of this title.
Plan Amendments Not Required Until January 1, 1989
For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title.