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26 U.S.C. § 1055 — Redeemable ground rents
Federal law — U.S. Code and appendices · legal_authorities
**(a) Character** For purposes of this subtitle—
(1) a redeemable ground rent shall be treated as being in the nature of a mortgage, and
(2) real property held subject to liabilities under a redeemable ground rent shall be treated as held subject to liabilities under a mortgage.
**(b) Application of subsection (a)**
(1) **In general** — Subsection (a) shall take effect on the day after the date of the enactment of this section and shall apply with respect to taxable years ending after such date of enactment.
(2) **Basis of holder** — In determining the basis of real property held subject to liabilities under a redeemable ground rent, subsection (a) shall apply whether such real property was acquired before or after the enactment of this section.
(3) **Basis of reserved redeemable ground rent** — In the case of a redeemable ground rent reserved or created on or before the date of the enactment of this section in connection with a transfer of the right to hold real property subject to liabilities under such ground rent, the basis of such ground rent after such date in the hands of the person who reserved or created the ground rent shall be the amount taken into account in respect of such ground rent for Federal income tax purposes as consideration for the disposition of such real property. If no such amount was taken into account, such basis shall be determined as if this section had not been enacted.
**(c) Redeemable ground rent defined** For purposes of this subtitle, the term “redeemable ground rent” means only a ground rent with respect to which—
(1) there is a lease of land which is assignable by the lessee without the consent of the lessor and which (together with periods for which the lease may be renewed at the option of the lessee) is for a term in excess
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Source location: Title 26, Chapter 1, § 1055; chapter-001-normal-taxes-and-surtaxes.md
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**(a) Character** For purposes of this subtitle—
(1) a redeemable ground rent shall be treated as being in the nature of a mortgage, and
(2) real property held subject to liabilities under a redeemable ground rent shall be treated as held subject to liabilities under a mortgage.
**(b) Application of subsection (a)**
(1) **In general** — Subsection (a) shall take effect on the day after the date of the enactment of this section and shall apply with respect to taxable years ending after such date of enactment.
(2) **Basis of holder** — In determining the basis of real property held subject to liabilities under a redeemable ground rent, subsection (a) shall apply whether such real property was acquired before or after the enactment of this section.
(3) **Basis of reserved redeemable ground rent** — In the case of a redeemable ground rent reserved or created on or before the date of the enactment of this section in connection with a transfer of the right to hold real property subject to liabilities under such ground rent, the basis of such ground rent after such date in the hands of the person who reserved or created the ground rent shall be the amount taken into account in respect of such ground rent for Federal income tax purposes as consideration for the disposition of such real property. If no such amount was taken into account, such basis shall be determined as if this section had not been enacted.
**(c) Redeemable ground rent defined** For purposes of this subtitle, the term “redeemable ground rent” means only a ground rent with respect to which—
(1) there is a lease of land which is assignable by the lessee without the consent of the lessor and which (together with periods for which the lease may be renewed at the option of the lessee) is for a term in excess of 15 years,
(2) the leaseholder has a present or future right to terminate, and to acquire the entire interest of the lessor in the land, by payment of a determined or determinable amount, which right exists by virtue of State or local law and not because of any private agreement or privately created condition, and
(3) the lessor’s interest in the land is primarily a security interest to protect the rental payments to which the lessor is entitled under the lease.
**(d) Cross reference** For treatment of rentals under redeemable ground rents as interest, see section 163(c).
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Federal law — U.S. Code and appendices · legal_authorities
(1) For nonrecognition of gain in connection with the transfer of obsolete vessels to the Maritime Administration under chapter 573 of title 46, United States Code, see [section 57307 of title 46](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title46-section57307&num=0&edition=prelim).
(2) For recognition of gain or loss in connection with the construction of new vessels, see chapter 533 of title 46, United States Code.
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1063
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Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** There shall be allowed as a deduction all interest paid or accrued within the taxable year on indebtedness.
**(b) Installment purchases where interest charge is not separately stated**
(1) **General rule** — If personal property or educational services are purchased under a contract—
(A) which provides that payment of part or all of the purchase price is to be made in installments, and
(B) in which carrying charges are separately stated but the interest charge cannot be ascertained,
then the payments made during the taxable year under the contract shall be treated for purposes of this section as if they included interest equal to 6 percent of the average unpaid balance under the contract during the taxable year. For purposes of the preceding sentence, the average unpaid balance is the sum of the unpaid balance outstanding on the first day of each month beginning during the taxable year, divided by 12. For purposes of this paragraph, the term “educational services” means any service (including lodging) which is purchased from an educational organization described in section 170(b)(1)(A)(ii) and which is provided for a student of such organization.
(2) **Limitation** — In the case of any contract to which paragraph (1) applies, the amount treated as interest for any taxable year shall not exceed the aggregate carrying charges which are properly attributable to such taxable year.
**(c) Redeemable ground rents** For purposes of this subtitle, any annual or periodic rental under a redeemable ground rent (excluding amounts in redemption thereof) shall be treated as interest on an indebtedness secured by a mortgage.
**(d) Limitation on investment interest**
(1) **In general** — In the case of a taxpayer other than a corporation, the amount al
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 163
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Federal law — U.S. Code and appendices · legal_authorities
Page 2294
TITLE 26—INTERNAL REVENUE CODE
§ 1054
mining the fair market value of stock in a cor-
poration as of March 1, 1913, due regard shall be
given to the fair market value of the assets of
the corporation as of that date.
(Aug. 16, 1954, ch. 736, 68A Stat. 311; Pub. L.
85–866, title I, § 47, Sept. 2, 1958, 72 Stat. 1642.)
Editorial Notes
AMENDMENTS
1958—Pub. L. 85–866 substituted ‘‘subtitle’’ for ‘‘part’’.
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE OF 1958 AMENDMENT
Amendment by Pub. L. 85–866 applicable to taxable
years beginning after Dec. 31, 1953, and ending after
Aug. 16, 1954, see section 1(c)(1) of Pub. L. 85–866, set out
as a note under section 165 of this title.
§ 1054. Certain stock of Federal National Mort-
gage Association
In the case of a share of stock issued pursuant
to section 303(c) of the Federal National Mort-
gage Association Charter Act (12 U.S.C., sec.
1718), the basis of such share in the hands of the
initial holder shall be an amount equal to the
capital contributions evidenced by such share
reduced by the amount (if any) required by sec-
tion 162(d) to be treated (with respect to such
share) as ordinary and necessary expenses paid
or incurred in carrying on a trade or business.
(Added Pub. L. 86–779, § 8(b), Sept. 14, 1960, 74
Stat. 1003.)
Editorial Notes
PRIOR PROVISIONS
A prior section 1054 was renumbered section 1062 of
this title.
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE
Section applicable with respect to taxable years be-
ginning after Dec. 31, 1959, see section 8(d) of Pub. L.
86–779, set out as an Effective Date of 1960 Amendment
note under section 162 of this title.
§ 1055. Redeemable ground rents
(a) Character
For purposes of this subtitle—
(1) a redeemable ground rent sha
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 1055
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