PUBLIC LAW 98-369—JULY 18, 1984
98 STAT. 537
"(A) Vi of 1 percent of the stated redemption price at maturity, multiplied by "(B) the number of complete years to maturity, then the original issue discount shall be treated as zero. "(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— "(A) publicly offered, and "(B) not issued for property, 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— "(A) is part of an issue a portion of which is traded on an m.^. established securities market, or "(B) is issued for stock or securities which are traded on an established securities market, the issue price of such debt instrument shall be the fair market value of such property. "(4) OTHER CASES.—Except in any case—
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"(A) to which paragraph (1), (2), or (3) of this subsection applies, or "(B) to which section 1274 applies. the issue price of a debt instrument which is issued for property shall be the stated redemption price at maturity. "(5) PROPERTY.—In applying this subsection, the term 'property' includes services and the right to use property, but such term does not include money. "(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 iitu (b) as if it were a debt instrument, "(B) the issue price determined for such unit shall be allocated to each element of such unit on the basis of the relationship of the fair market value of such element to the I fair market value of all elements in such unit, and "(C) the issue price of any debt instrument included in such unit shall be the portion of the issue price of the unit allocated to the debt instrument under subparagraph (B).
Post, p. 538.
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