U.S. Bancorp, Successor In Interest to West One Bancorp and Subsidiaries, formerly known as Moore Financial Group, Inc. - Page 9

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          on certain "short-term obligations" (the short-term obligation              
               Briefly, if the short-term obligation rules apply to a                 
          "nongovernmental" short-term obligation, the following results              
          obtain, for any taxable year.9  First, under sections 1281(a)(1)            

               8 These provisions were added to the Code in 1984, by the              
          Deficit Reduction Act of 1984 (DEFRA), Pub. L. 98-369, sec.                 
          41(a), 98 Stat. 548.  The provisions were amended in 1986, by               
          sec. 1803(a)(8) of TRA 1986, 100 Stat. 2794.                                
               9 Sec. 1281(a) provides as follows:                                    
               SEC. 1281.  CURRENT INCLUSION IN INCOME OF DISCOUNT ON                 
                         CERTAIN SHORT-TERM OBLIGATIONS.                              
                    (a) General Rule.--In the case of any short-term                  
               obligation to which this section applies, for purposes                 
               of this title--                                                        
                         (1)  there shall be included in the gross                    
                    income of the holder an amount equal to the sum of                
                    the daily portions of the acquisition discount for                
                    each day during the taxable year on which such                    
                    holder held such obligation, and                                  
                         (2)  any interest payable on the                             
                    obligation (other than interest taken into                        
                    account in determining the amount of the                          
                    acquisition discount) shall be included in                        
                    gross income as it accrues.                                       

               Sec. 1283(c) provides in part:                                         
                    SEC. 1283(c).  Special Rules for Nongovernmental                  
                         (1)  In general.--In the case of any short-                  
                    term obligation which is not a short-term                         
                    Government obligation * * * --                                    

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