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Section 148(f) was enacted by the Tax Reform Act of 1986,
and it is applicable to bonds issued after December 31, 1985.
Tax Reform Act of 1986, Pub. L. 99-514, sec. 1314(d), 100 Stat.
2664.7 Thus, our initial determination must be whether the Bonds
were issued on December 31, 1985, as petitioners contend, or on
February 20, 1986, as respondent contends. This is a mixed
question of fact and law, and we adopt the following analysis and
findings of the trial judge regarding the date on which the Bonds
were issued.
"Date of issue" is defined in section 1.103-13(b)(6), Income
Tax Regs., as
the date on which there is a physical delivery of the
evidences of indebtedness in exchange for the amount of
the issue price. For example, obligations are issued
when the issuer physically exchanges the obligations
for the underwriter's (or other purchaser's) check.[8]
7TRA sec. 1314(d), 100 Stat. 2664, provides:
Except as otherwise provided in this subsection, in the
case of a bond issued after December 31, 1985, section
103 of the 1954 Code shall be treated as including the
requirements of section 148(f) of the 1986 Code in
order for section 103(a) of the 1954 Code to apply.
8Respondent insists that the proper definition of "issue
date" for the Bonds involved here is that contained in sec.
1.150-1(c)(2), 57 Fed. Reg. 21032 (May 10, 1994), which provides:
(2) Date of Issue. The date of issue of a bond
is the first day on which there is physical delivery of
the written evidence of the bond in exchange for the
purchase price. Such day shall not be earlier than the
first day on which interest begins to accrue on the
(continued...)
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