78
PUBLIC LAW 88-272-FEB. 26, 1964
[78 STAT.
tlisiii () months after the date of the sale or exchange is an amount eqiial to 100 percent of such payment. (c) PAYMENTS rt) Wiiicii SECTIOX APPLIES.— "(1) IN GENERAL.—Except as provided in subsection (f), this section shall apply to any payment on account of the sale or exchange of property which constitutes part or all of the sales price and which is due more than 6 months after the date of such sale or exchange under a contract— " (A) under which some or all of the payments are due more than one year after the date of such sale or exchange, and " (B) under which, using a rate provided by regulations prescribed by the Secretary or his delegate for purposes of this subparagraph, there is total unstated interest. Any rate prescribed for determining whether there is total unstated interest for purposes of subparagraph (B) shall be at least one percentage point lower than the rate prescribed for purposes of subsection (b)(2). "(2) TREATMENT OF EVIDENCE OF INDEBTEDNESS.—For purposes of this section, an evidence of indebtedness of the purchaser given in consideration for the sale or exchange of property shall not be considered a payment, and any payment due under such evidence of indebtedness shall be treated as due under the contract for the sale or exchange. " (d) PAYMENTS T H A T ARE INDEFINII-E AS TO T I M E, LIABILITY, OR
AMOUNT.—In the case of a contract for the sale or exchange of property under which the liability for, or the amount or due date of, any portion of a payment cannot be determined at the time of the sale or exchange, this section shall be separately applied to such portion as if it (and any amount of interest attributable to such portion) were the only payments due under the contract; and such determinations of liability, amount, and due date shall be made at the time 2:>ayment of such portion is made. " (e) CHANGE I N TERMS OF CONTRACT.—If the liability for, or the
amount or due date of, any payment (including interest) under a contract for the sale or exchange of property is changed, the 'total inistated interest' under the contract shall be recomputed and allocated (with adjustment for prior interest (including unstated interest) payments) under regulations prescribed by the Secretary or his delegate. "(f)
68A Stat. 46. 26 USC 163.
26 USC 1231.
26 USC 1235.
EXCEPTIONS AND LIMITATIONS.— "(1) SALES PRICE OF $.S,OOO OR LESS.—This
section shall not apply to any payment on account of the sale or exchange of property if it can be determined at the time of such sale or exchange that the sales price cannot exceed $3,000. "(2) CARRYING CHARGES.—In the case of the purchaser, the tax treatment of amounts paid on account of the sale or exchange of property shall be made without regard to this section if any such amounts are treated under section 163(b) as if they included interest. "(3) TREATMENT OF SELLER.—In the case of the seller, the tax treatment of any amounts received on account of the sale or exchange of property shall be made without regard to this section if no part of any gain on such sale or exchange would be considered as gain from the sale or exchange of a capital asset or property described in section 1231. "(4) SALES OR EXCHANGES OF PATENTS.—This section shall not apply to any payments made pursuant to a transfer described in section 1235(a) (relating to sale or exchange of patents).
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