CH. 1—NORMAL TAXES AND SURTAXES
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(b) DEFINITIONS.—• (1) OEIGINAL ISSUE DISCOUNT.—For purposes of subsection (a),
the term "original issue discount" means the difference between the issue price and the stated redemption price a t maturity. If the original issue discount is less than one-fourth of 1 percent of the redemption price at maturity multiplied by the number of complete years to maturity, then the issue discount shall be considered to be zero. For purposes of this paragraph, the term "stated redemption price at maturity" means the amount fixed by the last modification of the purchase agreement and includes dividends payable at that time. (2) I S S U E PRICE.—In the case of issues of bonds or other evidences of indebtedness registered with the Securities and Exchange Commission, the term "issue price" means the initial offering price to the public (excluding bond houses and brokers) at which price a substantial amount of such bonds or other evidences of indebtedness were sold. In the case of privately placed issues of bonds or other evidence of indebtedness, the issue price of each such bond or other evidence of indebtedness is the price paid by the first buyer of such bond. For purposes of this paragraph, 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. (3) ISSUE DATE.—In the case of issues of bonds or other evidences of indebtedness registered with the Securities and Exchange Com• mission, the term "date of original issue" means the date on which the issue was first sold to the public at the issue price. I n the case of privately placed issues of bonds or other evidences of indebted( ness, the term "date of original issue" means the date on which each ( such bond or other evidence of indebtedness was sold by the issuer. (c) BOND W I THE X C E S S NUMBER OF COUPONS DETACHED.—If—
(1) a bond or other evidence of indebtedness issued at any time I with interest coupons is purchased after the date of enactment of ( this title, and (2) the purchaser does not receive all the coupons which first become payable more than 12 months after the date of the purchase, then the gain on the sale or other disposition of such evidence of indebtedness by such purchaser shall be considered as gain from the sale or exchange of property which is not a capital asset to the extent that the market value (determined as of the time of the purchase) of the evidence of indebtedness with coupons attached exceeds the purchase price. If this subsection and subsection (a)(2)(A) apply with respect to gain realized on the retirement of any bond, then subsection (a)(2)(A) shall apply with respect to that part of the gain to which this subsection does not apply. (d) CROSS R E F E R E N C E. — For special treatment of face-amount certificates on retirement, see section 72.
SEC. 1233. GAINS AND LOSSES FROM SHORT SALES. (a) CAPITAL AssETS.-For purposes of this subtitle, gain or loss from the short sale of property, other than a hedging transaction in commodity futures, shall be considered as gain or loss from the sale or exchange of a capital asset to the extent that the property, § 1233(a)
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