§ 1275. Other definitions and special rules
(a)
Definitions
For purposes of this subpart—
(1)
Debt instrument
(A)
In general
Except as provided in subparagraph (B), the term “debt instrument” means a bond, debenture, note, or certificate or other evidence of indebtedness.
(B)
Exception for certain annuity contracts
The term “debt instrument” shall not include any annuity contract to which section
72 applies and which—
(ii)
is issued by an insurance company subject to tax under subchapter L (or by an entity described in section
501
(c) and exempt from tax under section
501
(a) which would be subject to tax under subchapter L were it not so exempt)—
(I)
in a transaction in which there is no consideration other than cash or another annuity contract meeting the requirements of this clause,
(2)
Issue date
(A)
Publicly offered debt instruments
In the case of any debt instrument which is publicly offered, the term “date of original issue” means the date on which the issue was first issued to the public.
(b)
Treatment of borrower in the case of certain loans for personal use
(2)
Original issue discount deducted on cash basis in certain cases
In the case of any debt instrument, if—
(3)
Personal use property
For purposes of this subsection, the term “personal use property” means any property substantially all of the use of which by the taxpayer is not in connection with a trade or business of the taxpayer or an activity described in section
212. The determination of whether property is described in the preceding sentence shall be made as of the time of issuance of the debt instrument.
(c)
Information requirements
(1)
Information required to be set forth on instrument
(A)
In general
In the case of any debt instrument having original issue discount, the Secretary may by regulations require that—
be set forth on such instrument.
(B)
Special rule for instruments not publicly offered
In the case of any issue of debt instruments not publicly offered, the regulations prescribed under subparagraph (A) shall not require the information to be set forth on the debt instrument before any disposition of such instrument by the first buyer.
(2)
Information required to be submitted to Secretary
In the case of any issue of publicly offered debt instruments having original issue discount, the issuer shall (at such time and in such manner as the Secretary shall by regulation prescribe) furnish the Secretary the following information:
For purposes of the preceding sentence, any person who makes a public offering of stripped bonds (or stripped coupons) shall be treated as the issuer of a publicly offered debt instrument having original issue discount.
(4)
Cross reference
For civil penalty for failure to meet requirements of this subsection, see section
6706.
(d)
Regulation authority
The Secretary may prescribe regulations providing that where, by reason of varying rates of interest, put or call options, indefinite maturities, contingent payments, assumptions of debt instruments, or other circumstances, the tax treatment under this subpart (or section
163
(e)) does not carry out the purposes of this subpart (or section
163
(e)), such treatment shall be modified to the extent appropriate to carry out the purposes of this subpart (or section
163
(e)).