§ 1273. Determination of amount of original issue discount
(a)
General rule
For purposes of this subpart—
(2)
Stated redemption price at maturity
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).
(b)
Issue price
For purposes of this subpart—
(1)
Publicly offered debt instruments not issued for property
In the case of any issue of debt instruments—
the issue price is the initial offering price to the public (excluding bond houses and brokers) at which price a substantial amount of such debt instruments was sold.
(2)
Other debt instruments not issued for property
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.
(3)
Debt instruments issued for property where there is public trading
In the case of a debt instrument which is issued for property and which—
the issue price of such debt instrument shall be the fair market value of such property.
(c)
Special rules for applying subsection (b)
For purposes of subsection (b)—
(1)
Initial offering price; price paid by the first buyer
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.
(2)
Treatment of investment units
In the case of any debt instrument and an option, security, or other property issued together as an investment unit—
(A)
the issue price for such unit shall be determined in accordance with the rules of this subsection and subsection (b) as if it were a debt instrument,