Notes on 26 U.S.C. § 171 : US Code - Notes

Search Notes on 26 U.S.C. § 171 : US Code - Notes

(Aug. 16, 1954, ch. 736, 68A Stat. 61; Pub. L. 85-866, title I,
Sec. 13(a), Sept. 2, 1958, 72 Stat. 1610; Pub. L. 94-455, title
XIX, Secs. 1901(b)(1)(E), 1906(b)(13)(A), 1951(b)(5)(A), Oct. 4,
1976, 90 Stat. 1790, 1834, 1837; Pub. L. 99-514, title VI, Sec.
643(a), title XVIII, Sec. 1803(a)(11)(A), (B), (12)(A), Oct. 22,
1986, 100 Stat. 2285, 2795; Pub. L. 100-647, title I, Sec.
1006(j)(1)(A), Nov. 10, 1988, 102 Stat. 3411; Pub. L. 108-357,
title IV, Sec. 413(c)(2), Oct. 22, 2004, 118 Stat. 1507.)
AMENDMENTS
2004 - Subsec. (c)(2). Pub. L. 108-357, Sec. 413(c)(2)(B), which
directed amendment of par. (2) by striking out ", or foreign
personal holding company", was executed by striking out "or foreign
personal holding company" after "the common trust fund", to reflect
the probable intent of Congress.
Pub. L. 108-357, Sec. 413(c)(2)(A), struck out ", or by a foreign
personal holding company, as defined in section 552" after "section
584(a)".
1988 - Subsec. (e). Pub. L. 100-647 substituted "Treatment as
offset to interest payments" for "Treatment as interest" in heading
and amended text generally. Prior to amendment, text read as
follows: "Except as provided in regulations, the amount of any
amortizable bond premium with respect to which a deduction is
allowed under subsection (a)(1) for any taxable year shall be
treated as interest for purposes of this title."
1986 - Subsec. (b)(3). Pub. L. 99-514, Sec. 1803(a)(11)(A),
amended par. (3) generally. Prior to amendment, par. (3) read as
follows: "The determinations required under paragraphs (1) and (2)
shall be made -
"(A) in accordance with the method of amortizing bond premium
regularly employed by the holder of the bond, if such method is
reasonable;
"(B) in all other cases, in accordance with regulations
prescribing reasonable methods of amortizing bond premium
prescribed by the Secretary."
Subsec. (b)(4). Pub. L. 99-514, Sec. 1803(a)(12)(A), added par.
(4).
Subsec. (d). Pub. L. 99-514, Sec. 1803(a)(11)(B), struck out
"issued by any corporation and bearing interest (including any like
obligation issued by a government or political subdivision
thereof)," after "evidence of indebtedness,".
Subsecs. (e), (f). Pub. L. 99-514, Sec. 643(a), added subsec. (e)
and redesignated former subsec. (e) as (f).
1976 - Subsec. (a)(1). Pub. L. 94-455, Sec. 1901(b)(1)(E)(i),
substituted "Taxable bonds" for "Interest wholly or partially
taxable" after "(1)".
Subsec. (a)(2). Pub. L. 94-455, Sec. 1901(b)(1)(E)(ii),
substituted "Tax-exempt bonds" for "Interest wholly tax-exempt"
after "(2)".
Subsec. (a)(3). Pub. L. 94-455, Sec. 1901(b)(1)(E)(iii),
redesignated par. (4) as (3). Former par. (3), relating to
adjustment of credit or deduction for interest partially tax-
exempt, was struck out.
Subsec. (a)(4). Pub. L. 94-455, Sec. 1901(b)(1)(E)(iii),
redesignated par. (4) as par. (3).
Subsec. (b)(1)(B)(i). Pub. L. 94-455, Sec. 1951(b)(5)(A)(ii),
substituted "clause (ii) applies, or" for "clause (ii) or (iii)
applies" after "bond to which" and inserted "and" at the end.
Subsec. (b)(1)(B)(ii). Pub. L. 94-455, Secs. 1901(b)(1)(E)(iv),
1951(b)(5)(A)(iii), substituted "subsection (a)(1)" for "subsection
(c)(1)(B)" after "bond described in" and "and" for "or" after
"1957".
Subsec. (b)(1)(B)(iii). Pub. L. 94-455, Sec. 1951(b)(5)(A)(i),
struck out cl. (iii) relating to certain bonds acquired before
1958.
Subsec. (b)(2). Pub. L. 94-455, Sec. 1951(b)(5)(A)(iv), struck
out "or (iii)" after "paragraph (1)(B)(ii)".
Subsec. (b)(3)(B). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck
out "or his delegate" after "Secretary".
Subsec. (c)(1). Pub. L. 94-455, Sec. 1901(b)(1)(E)(v),
substituted "In the case of bonds the interest on which is not
excludible from gross income, this section shall apply only if the
taxpayer has so elected" for "This section shall apply with respect
to the following classes of taxpayers with respect to the following
classes of bonds only if the taxpayer has elected to have this
section apply" after "election permitted", and struck out subpars.
(A) and (B) relating to partially tax-exempt, and wholly taxable,
bonds.
Subsec. (c)(2). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out
"or his delegate" in three places after "Secretary".
1958 - Subsec. (b)(1)(B). Pub. L. 85-866, Sec. 13(a)(1),
substituted ", in the case of any bond other than a bond to which
clause (ii) or (iii) applies" for "(but in the case of bonds
described in subsection (c)(1)(B) issued after January 22, 1951,
and acquired after January 22, 1954, only if such earlier call date
is a date more than 3 years after the date of such issue), and",
designated such provision as cl. (i), and added cl. (ii) and (iii).
Subsec. (b)(2). Pub. L. 85-866, Sec. 13(a)(2), substituted "In
the case of a bond to which paragraph (1)(B)(ii) or (iii) applies
and which has a call date," for "In the case of a bond described in
subsection (c)(1)(B) issued after January 22, 1951, and acquired
after January 22, 1954, which has a call date not more than 3 years
after the date of such issue," in second sentence.
EFFECTIVE DATE OF 2004 AMENDMENT
Amendment by Pub. L. 108-357 applicable to taxable years of
foreign corporations beginning after Dec. 31, 2004, and to taxable
years of United States shareholders with or within which such
taxable years of foreign corporations end, see section 413(d)(1) of
Pub. L. 108-357, set out as an Effective and Termination Dates of
2004 Amendments note under section 1 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Section 1006(j)(1)(C) of Pub. L. 100-647 provided that: "The
amendments made by this paragraph [amending this section and
section 1016 of this title] shall apply in the case of obligations
acquired after December 31, 1987; except that the taxpayer may
elect to have such amendment apply to obligations acquired after
October 22, 1986."
EFFECTIVE DATE OF 1986 AMENDMENT
Section 643(b) of Pub. L. 99-514, as amended by Pub. L. 100-647,
title I, Sec. 1006(j)(2), Nov. 10, 1988, 102 Stat. 3411, provided
that:
"(1) In general. - The amendment made by subsection (a) [amending
this section] shall apply to obligations acquired after the date of
the enactment of this Act [Oct. 22, 1986], in taxable years ending
after such date.
"(2) Revocation of election. - In the case of a taxpayer with
respect to whom an election is in effect on the date of enactment
of this Act [Oct. 22, 1986], under section 171(c) of the Internal
Revenue Code of 1986, such election shall apply to obligations
acquired after the date of the enactment of this Act only if the
taxpayer chooses (at such time and in such manner as may be
prescribed by the Secretary of the Treasury or his delegate) to
have such election apply with respect to such obligations."
Section 1803(a)(11)(C) of Pub. L. 99-514 provided that:
"(i) The amendments made by this paragraph [amending this
section] shall apply to obligations issued after September 27,
1985.
"(ii) In the case of a taxpayer with respect to whom an election
is in effect on the date of the enactment of this Act [Oct. 22,
1986] under section 171(c) of the Internal Revenue Code of 1954
[now 1986], such election shall apply to obligations issued after
September 27, 1985, only if the taxpayer chooses (at such time and
in such manner as may be prescribed by the Secretary of the
Treasury or his delegate) to have such election apply with respect
to such obligations."
Section 1803(a)(12)(B) of Pub. L. 99-514 provided that: "The
amendment made by subparagraph (A) [amending this section] shall
apply to exchanges after May 6, 1986."
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 1901(b)(1)(E)(iii)-(v) of Pub. L. 94-455
effective for taxable years beginning after Dec. 31, 1976, see
section 1901(d) of Pub. L. 94-455, set out as a note under section
2 of this title.
Amendment by section 1951(b)(5)(A)(i) of Pub. L. 94-455 effective
for taxable years beginning after Dec. 31, 1976, see section
1951(d) of Pub. L. 94-455, set out as a note under section 72 of
this title.
EFFECTIVE DATE OF 1958 AMENDMENT
Section 13(b) of Pub. L. 85-866 provided that: "The amendments
made by subsection (a) [amending this section] shall apply with
respect to taxable years ending after December 31, 1957."
SAVINGS PROVISION
Section 1951(b)(5)(B) of Pub. L. 94-455 provided that:
"Notwithstanding the amendments made by subparagraph (A) [amending
this section], in the case of a bond the interest on which is not
excludable from gross income -
"(i) which was issued after January 22, 1951, with a call date
not more than 3 years after the date of such issue, and
"(ii) which was acquired by the taxpayer after January 22,
1954, and before January 1, 1958,
the bond premium for a taxable year beginning after December 31,
1975, shall not be determined under section 171(b)(1)(B)(i) but
shall be determined with reference to the amount payable on
maturity, and if the bond is called before its maturity, the bond
premium for the year in which the bond is called shall be
determined in accordance with the provisions of section 171(b)(2)."
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989
For provisions directing that if any amendments made by subtitle
A or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or
title XVIII [Secs. 1800-1899A] of Pub. L. 99-514 require an
amendment to any plan, such plan amendment shall not be required to
be made before the first plan year beginning on or after Jan. 1,
1989, see section 1140 of Pub. L. 99-514, as amended, set out as a
note under section 401 of this title.
(!1) So in original.