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26 U.S.C. § 171 — Amortizable bond premium

Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 171 — Amortizable bond premium

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Source location: Title 26, Chapter 1, § 171; chapter-001-normal-taxes-and-surtaxes.md

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**(a) General rule** In the case of any bond, as defined in subsection (d), the following rules shall apply to the amortizable bond premium (determined under subsection (b)) on the bond: (1) **Taxable bonds** — In the case of a bond (other than a bond the interest on which is excludable from gross income), the amount of the amortizable bond premium for the taxable year shall be allowed as a deduction. (2) **Tax-exempt bonds** — In the case of any bond the interest on which is excludable from gross income, no deduction shall be allowed for the amortizable bond premium for the taxable year. (3) **Cross reference** — For adjustment to basis on account of amortizable bond premium, see section 1016(a)(5). **(b) Amortizable bond premium** (1) **Amount of bond premium** — For purposes of paragraph (2), the amount of bond premium, in the case of the holder of any bond, shall be determined— (A) with reference to the amount of the basis (for determining loss on sale or exchange) of such bond, (B) (i) with reference to the amount payable on maturity (or if it results in a smaller amortizable bond premium attributable to the period before the call date, with reference to the amount payable on the earlier call date), in the case of a bond described in subsection (a)(1), and (ii) with reference to the amount payable on maturity or on an earlier call date, in the case of a bond described in subsection (a)(2). (C) with adjustments proper to reflect unamortized bond premium, with respect to the bond, for the period before the date as of which subsection (a) becomes applicable with respect to the taxpayer with respect to such bond. In no case shall the amount of bond premium on a convertible bond include any amount attributable to the conversion features of the bond. (2) **Amount amortizable** — The amortizable bond premium of the taxable year shall be the amount of the bond premium attributable to such year. In the case of a bond to which paragraph (1)(B)(i) applies and which has a call date, the amount of bond premium attributable to the taxable year in which the bond is called shall include an amount equal to the excess of the amount of the adjusted basis (for determining loss on sale or exchange) of such bond as of the beginning of the taxable year over the amount received on redemption of the bond or (if greater) the amount payable on maturity. (3) **Method of determination** (A) *In general* — Except as provided in regulations prescribed by the Secretary, the determinations required under paragraphs (1) and (2) shall be made on the basis of the taxpayer’s yield to maturity determined by— (i) using the taxpayer’s basis (for purposes of determining loss on sale or exchange) of the obligation, and (ii) compounding at the close of each accrual period (as defined in section 1272(a)(5)). (B) *Special rule where earlier call date is used* — For purposes of subparagraph (A), if the amount payable on an earlier call date is used under paragraph (1)(B)(i) in determining the amortizable bond premium attributable to the period before the earlier call date, such bond shall be treated as maturing on such date for the amount so payable and then reissued on such date for the amount so payable. (4) **Treatment of certain bonds acquired in exchange for other property** (A) *In general* — If— (i) a bond is acquired by any person in exchange for other property, and (ii) the basis of such bond is determined (in whole or in part) by reference to the basis of such other property, for purposes of applying this subsection to such bond while held by such person, the basis of such bond shall not exceed its fair market value immediately after the exchange. A similar rule shall apply in the case of such bond while held by any other person whose basis is determined (in whole or in part) by reference to the basis in the hands of the person referred to in clause (i). (B) *Special rule where bond exchanged in reorganization* — Subparagraph (A) shall not apply to an exchange by the taxpayer of a bond for another bond if such exchange is a part of a reorganization (as defined in section 368). If any portion of the basis of the taxpayer in a bond transferred in such an exchange is not taken into account in determining bond premium by reason of this paragraph, such portion shall not be taken into account in determining the amount of bond premium on any bond received in the exchange. **(c) Election as to taxable bonds** (1) **Eligibility to elect; bonds with respect to which election permitted** — In the case of bonds the interest on which is not excludible from gross income, this section shall apply only if the taxpayer has so elected. (2) **Manner and effect of election** — The election authorized under this subsection shall be made in accordance with such regulations as the Secretary shall prescribe. If such election is made with respect to any bond (described in paragraph (1)) of the taxpayer, it shall also apply to all such bonds held by the taxpayer at the beginning of the first taxable year to which the election applies and to all such bonds thereafter acquired by him and shall be binding for all subsequent taxable years with respect to all such bonds of the taxpayer, unless, on application by the taxpayer, the Secretary permits him, subject to such conditions as the Secretary deems necessary, to revoke such election. In the case of bonds held by a common trust fund, as defined in section 584(a), the election authorized under this subsection shall be exercisable with respect to such bonds only by the common trust fund. In case of bonds held by an estate or trust, the election authorized under this subsection shall be exercisable with respect to such bonds only by the fiduciary. **(d) Bond defined** For purposes of this section, the term “bond” means any bond, debenture, note, or certificate or other evidence of indebtedness, but does not include any such obligation which constitutes stock in trade of the taxpayer or any such obligation of a kind which would properly be included in the inventory of the taxpayer if on hand at the close of the taxable year, or any such obligation held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business. **(e) Treatment as offset to interest payments** Except as provided in regulations, in the case of any taxable bond— (1) the amount of any bond premium shall be allocated among the interest payments on the bond under rules similar to the rules of subsection (b)(3), and (2) in lieu of any deduction under subsection (a), the amount of any premium so allocated to any interest payment shall be applied against (and operate to reduce) the amount of such interest payment. For purposes of the preceding sentence, the term “taxable bond” means any bond the interest of which is not excludable from gross income. **(f) Dealers in tax-exempt securities** For special rules applicable, in the case of dealers in securities, with respect to premium attributable to certain wholly tax-exempt securities, see section 75.

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Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 1016 — Adjustments to basis

**(a) General rule** Proper adjustment in respect of the property shall in all cases be made— (1) for expenditures, receipts, losses, or other items, properly chargeable to capital account, but no such adjustment shall be made— (A) for— (i) taxes or other carrying charges described in section 266; or (ii) expenditures described in section 173 (relating to circulation expenditures), for which deductions have been taken by the taxpayer in determining taxable income for the taxable year or prior taxable years; or (B) for mortality, expense, or other reasonable charges incurred under an annuity or life insurance contract; (2) in respect of any period since February 28, 1913, for exhaustion, wear and tear, obsolescence, amortization, and depletion, to the extent of the amount— (A) allowed as deductions in computing taxable income under this subtitle or prior income tax laws, and (B) resulting (by reason of the deductions so allowed) in a reduction for any taxable year of the taxpayer’s taxes under this subtitle (other than chapter 2, relating to tax on self-employment income), or prior income, war-profits, or excess-profits tax laws, but not less than the amount allowable under this subtitle or prior income tax laws. Where no method has been adopted under section 167 (relating to depreciation deduction), the amount allowable shall be determined under the straight line method. Subparagraph (B) of this paragraph shall not apply in respect of any period since February 28, 1913, and before January 1, 1952, unless an election has been made under section 1020 (as in effect before the date of the enactment of the Tax Reform Act of 1976). Where for any taxable year before the taxable year 1932 the depletion allowance was based on discovery value or a pe

Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1016

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Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 1 — Tax imposed

**(a) Married individuals filing joint returns and surviving spouses** There is hereby imposed on the taxable income of— (1) every married individual (as defined in section 7703) who makes a single return jointly with his spouse under section 6013, and (2) every surviving spouse (as defined in section 2(a)), a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $36,90015% of taxable income. Over $36,900 but not over $89,150$5,535, plus 28% of the excess over $36,900. Over $89,150 but not over $140,000$20,165, plus 31% of the excess over $89,150. Over $140,000 but not over $250,000$35,928.50, plus 36% of the excess over $140,000. Over $250,000$75,528.50, plus 39.6% of the excess over $250,000. **(b) Heads of households** There is hereby imposed on the taxable income of every head of a household (as defined in section 2(b)) a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $29,60015% of taxable income. Over $29,600 but not over $76,400$4,440, plus 28% of the excess over $29,600. Over $76,400 but not over $127,500$17,544, plus 31% of the excess over $76,400. Over $127,500 but not over $250,000$33,385, plus 36% of the excess over $127,500. Over $250,000$77,485, plus 39.6% of the excess over $250,000. **(c) Unmarried individuals (other than surviving spouses and heads of households)** There is hereby imposed on the taxable income of every individual (other than a surviving spouse as defined in section 2(a) or the head of a household as defined in section 2(b)) who is not a married individual (as defined in section 7703) a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $22,10015% of taxable income. Over $22,100 but not over $53,50

Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1

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Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 72 — Annuities; certain proceeds of endowment and life insurance contracts

**(a) General rules for annuities** (1) **Income inclusion** — Except as otherwise provided in this chapter, gross income includes any amount received as an annuity (whether for a period certain or during one or more lives) under an annuity, endowment, or life insurance contract. (2) **Partial annuitization** — If any amount is received as an annuity for a period of 10 years or more or during one or more lives under any portion of an annuity, endowment, or life insurance contract— (A) such portion shall be treated as a separate contract for purposes of this section, (B) for purposes of applying subsections (b), (c), and (e), the investment in the contract shall be allocated pro rata between each portion of the contract from which amounts are received as an annuity and the portion of the contract from which amounts are not received as an annuity, and (C) a separate annuity starting date under subsection (c)(4) shall be determined with respect to each portion of the contract from which amounts are received as an annuity. **(b) Exclusion ratio** (1) **In general** — Gross income does not include that part of any amount received as an annuity under an annuity, endowment, or life insurance contract which bears the same ratio to such amount as the investment in the contract (as of the annuity starting date) bears to the expected return under the contract (as of such date). (2) **Exclusion limited to investment** — The portion of any amount received as an annuity which is excluded from gross income under paragraph (1) shall not exceed the unrecovered investment in the contract immediately before the receipt of such amount. (3) **Deduction where annuity payments cease before entire investment recovered** (A) *In general* — If— (i) after the annuity starti

Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 72

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Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 2 — Definitions and special rules

**(a) Definition of surviving spouse** (1) **In general** — For purposes of section 1, the term “surviving spouse” means a taxpayer— (A) whose spouse died during either of his two taxable years immediately preceding the taxable year, and (B) who maintains as his home a household which constitutes for the taxable year the principal place of abode (as a member of such household) of a dependent (i) who (within the meaning of section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) is a son, stepson, daughter, or stepdaughter of the taxpayer, and (ii) with respect to whom the taxpayer is entitled to a deduction for the taxable year under section 151. (2) **Limitations** — Notwithstanding paragraph (1), for purposes of section 1 a taxpayer shall not be considered to be a surviving spouse— (A) if the taxpayer has remarried at any time before the close of the taxable year, or (B) unless, for the taxpayer’s taxable year during which his spouse died, a joint return could have been made under the provisions of section 6013 (without regard to subsection (a)(3) thereof). (3) **Special rule where deceased spouse was in missing status** — If an individual was in a missing status (within the meaning of section 6013(f)(3)) as a result of service in a combat zone (as determined for purposes of section 112) and if such individual remains in such status until the date referred to in subparagraph (A) or (B), then, for purposes of paragraph (1)(A), the date on which such individual died shall be treated as the earlier of the date determined under subparagraph (A) or the date determined under subparagraph (B): (A) the date on which the determination is made under [section 556 of title 37](https://uscode.house.gov/view.xhtml?req=granuleid:

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Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 401 — Qualified pension, profit-sharing, and stock bonus plans

**(a) Requirements for qualification** A trust created or organized in the United States and forming part of a stock bonus, pension, or profit-sharing plan of an employer for the exclusive benefit of his employees or their beneficiaries shall constitute a qualified trust under this section— (1) if contributions are made to the trust by such employer, or employees, or both, or by another employer who is entitled to deduct his contributions under section 404(a)(3)(B) (relating to deduction for contributions to profit-sharing and stock bonus plans), or by a charitable remainder trust pursuant to a qualified gratuitous transfer (as defined in section 664(g)(1)), for the purpose of distributing to such employees or their beneficiaries the corpus and income of the fund accumulated by the trust in accordance with such plan; (2) if under the trust instrument it is impossible, at any time prior to the satisfaction of all liabilities with respect to employees and their beneficiaries under the trust, for any part of the corpus or income to be (within the taxable year or thereafter) used for, or diverted to, purposes other than for the exclusive benefit of his employees or their beneficiaries (but this paragraph shall not be construed, in the case of a multiemployer plan, to prohibit the return of a contribution within 6 months after the plan administrator determines that the contribution was made by a mistake of fact or law (other than a mistake relating to whether the plan is described in section 401(a) or the trust which is part of such plan is exempt from taxation under section 501(a), or the return of any withdrawal liability payment determined to be an overpayment within 6 months of such determination)); (3) if the plan of which such trust is a part satisfies the requireme

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Federal law — U.S. Code and appendices · legal_authorities

26 U.S.C. § 171 — Amortizable bond premium

Page 873 TITLE 26—INTERNAL REVENUE CODE § 171 ‘‘(C) a statement that such appraisal was prepared for income tax purposes, ‘‘(D) the qualifications of the qualified appraiser, ‘‘(E) the signature and TIN of such appaiser, [sic] and ‘‘(F) such additional information as the Secretary prescribes in such regulations. ‘‘(5) QUALIFIED APPRAISER.— ‘‘(A) IN GENERAL.—For purposes of this subsection, the term ‘qualified appraiser’ means an appraiser qualified to make appraisals of the type of property donated, who is not— ‘‘(i) the taxpayer, ‘‘(ii) a party to the transaction in which the tax- payer acquired the property, ‘‘(iii) the donee, ‘‘(iv) any person employed by any of the foregoing persons or related to any of the foregoing persons under section 267(b) of the Internal Revenue Code of 1986, or ‘‘(v) to the extent provided in such regulations, any person whose relationship to the taxpayer would cause a reasonable person to question the independence of such appraiser. ‘‘(B) APPRAISAL FEES.—For purposes of this sub- section, an appraisal shall not be treated as a quali- fied appraisal if all or part of the fee paid for such ap- praisal is based on a percentage of the appraised value of the property. The preceding sentence shall not apply to fees based on a sliding scale that are paid to a generally recognized association regulating appraisers. ‘‘(6) OTHER DEFINITIONS.—For purposes of this sub- section— ‘‘(A) CLOSELY HELD CORPORATION.—The term ‘close- ly held corporation’ means any corporation (other than an S corporation) with respect to which the stock ownership requirement of paragraph (2) of sec- tion 542(a) of such Code is met. ‘‘(B) PERSONAL SERVICE CORPORATION.—The term ‘personal service corporation’ means any corporation (other than an S c

Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 171

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