134
Opinion of the Court
during the term of the repo. But the dispositive question is whether the Trusts earned interest on "obligations of the United States Government," not whether the Trusts "owned" such obligations. As respondent himself concedes, "[t]he concept of 'ownership' is simply not an issue under 31 U. S. C. § 3124." Brief for Respondent 10.
Even if it did matter how repos were characterized for
purposes of § 3124(a), Frank Lyon Co. does not support respondent's position. Whatever the language relied on by respondent may mean, our decision in that case to honor the taxpayer's characterization of its transaction as a "sale-andleaseback" rather than a "financing transaction" was founded on an examination of "the substance and economic realities of the transaction." 435 U. S., at 582. This examination included identification of 27 specific facts. See id., at 582-583. The substance and economic realities of the Trusts' repo transactions, as manifested in the specific facts discussed above, are that the Trusts do not receive either coupon interest or discount interest from federal securities by participating in repos. Rather, in economic reality, the Trusts receive interest on cash they have lent to the Seller-Borrower.
Respondent does not specifically dispute this conclusion but argues that repos are characterized as ordinary sales and repurchases for purposes of federal securities, bankruptcy, and banking law as well as commercial and local government law. We need not examine the accuracy of these assertions, for we are not called upon in this case to interpret any of those bodies of law. Our decision today is an interpretation only of 31 U. S. C. § 3124(a)—not the Securities Exchange Act of 1934, the Bankruptcy Code, or any other body of law.
B
At oral argument, respondent advanced another argument against the interpretation of § 3124(a) adopted here: Although petitioner's Revenue Ruling nominally acknowledges the right of the Seller-Borrower to claim the exemption granted by § 3124(a), Nebraska's income tax scheme will not
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