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Bank to Chase Manhattan Bank and subsequently to Heritage, to the
credit of the developer partnerships and then to Unified.
Because the Bonds were issued after December 31, 1985, section
148(f) applies.
Section 148(f)(1) provides that a bond shall be treated as
an arbitrage bond unless the amount described in section
148(f)(2) is paid to the United States. Such amount is equal to
the sum of:
(A) the excess of--
(i) the amount earned on all nonpurpose
investments (other than investments
attributable to an excess described in this
subparagraph), over
(ii) the amount which would have been
earned if such nonpurpose investments were
invested at a rate equal to the yield on the
issue, plus
(B) any income attributable to the excess
described in subparagraph (A),
Sec. 148(f)(2). Payments required by section 148(f)(2) are
generally required to be made at 5-year intervals. Each required
installment must be in an amount that ensures that 90 percent of
the amount described in section 148(f)(2) has been paid, and full
payment must be made with the last installment. Sec. 148(f)(3).9
9Sec. 148(f)(3) provides in part:
Except to the extent provided by the Secretary, the
amount which is required to be paid to the United
(continued...)
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