Lower discount rate
In the case of any qualified debt instrument, the discount rate used for purposes of sections 483 and 1274 shall not exceed 9 percent, compounded semiannually.
Qualified debt instrument defined
For purposes of this section, the term “qualified debt instrument” means any debt instrument given in consideration for the sale or exchange of property (other than new section 38 property within the meaning of section 48(b), as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) if the stated principal amount of such instrument does not exceed $2,800,000.
Election to use cash method where stated principal amount does not exceed $2,000,000
In general
Cash method debt instrument
Successors bound by election
In general
Except as provided in subparagraph (B), paragraph (1) shall apply to any successor to the borrower or lender with respect to a cash method debt instrument.
Exception where lender transfers debt instrument to accrual method taxpayer
If the lender (or any successor) transfers any cash method debt instrument to a taxpayer who uses an accrual method of accounting, this paragraph shall not apply with respect to such instrument for periods after such transfer.
Fair market value rule in potentially abusive situations
In the case of any cash method debt instrument, section 483 shall be applied as if it included provisions similar to the provisions of section 1274(b)(3).
Other special rules
Aggregation rules
Adjustment for inflation
Regulations
Pub. L. 99–121, title I, § 102(a)99 Stat. 506Pub. L. 101–508, title XI, § 11813(b)(22)104 Stat. 1388–555Pub. L. 104–188, title I, § 1704(t)(62)110 Stat. 1890Pub. L. 115–97, title I, § 11002(d)(10)131 Stat. 2062(Added , , ; amended , , ; , , ; , , .)
Inflation Adjusted Items for Certain Years
section 1 of this titleFor inflation adjustment of certain items in this section, see Revenue Rulings listed in a table below and Revenue Procedures listed in a table under .
Editorial Notes
References in Text
Pub. L. 101–508The date of the enactment of the Revenue Reconciliation Act of 1990, referred to in subsec. (b), is the date of enactment of , which was approved .
Amendments
Pub. L. 115–972017—Subsec. (d)(2). amended par. (2) generally. Prior to amendment, text read as follows:
In general“(A) .—In the case of any debt instrument arising out of a sale or exchange during any calendar year after 1989, each dollar amount contained in the preceding provisions of this section shall be increased by the inflation adjustment for such calendar year. Any increase under the preceding sentence shall be rounded to the nearest multiple of $100 (or, if such increase is a multiple of $50, such increase shall be increased to the nearest multiple of $100).
Inflation adjustment“(B) .—For purposes of subparagraph (A), the inflation adjustment for any calendar year is the percentage (if any) by which—
“(i) the CPI for the preceding calendar year exceeds
“(ii) the CPI for calendar year 1988.
For purposes of the preceding sentence, the CPI for any calendar year is the average of the Consumer Price Index as of the close of the 12-month period ending on September 30 of such calendar year.”
Pub. L. 104–1881996—Subsec. (c)(1)(B). substituted “instrument” for “instument”.
Pub. L. 101–5081990—Subsec. (b). inserted “, as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990” after “section 48(b)”.
Statutory Notes and Related Subsidiaries
Effective Date of 2017 Amendment
Pub. L. 115–97section 11002(e) of Pub. L. 115–97section 1 of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .
Effective Date of 1990 Amendment
Pub. L. 101–508section 49(e) of this titlesection 46(d) of this titlesection 46(b)(2)(C) of this titlesection 11813(c) of Pub. L. 101–508section 45K of this titleAmendment by applicable to property placed in service after , but not applicable to any transition property (as defined in ), any property with respect to which qualified progress expenditures were previously taken into account under , and any property described in , as such sections were in effect on , see , set out as a note under .
Effective Date
section 105(a)(1) of Pub. L. 99–121section 1274 of this titleSection applicable to sales and exchanges after , in taxable years ending after such date, see , set out as an Effective Date of 1985 Amendment note under .
Savings Provision
Pub. L. 101–508section 11821(b) of Pub. L. 101–508section 45K of this titleFor provisions that nothing in amendment by be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to , for purposes of determining liability for tax for periods ending after , see , set out as a note under .
Inflation Adjusted Items for Certain Years
section 1 of this titlePer Revenue Procedure 2018–57, after 2018, a separate Revenue Ruling relating to inflation-adjusted amounts under this section will not be published. Starting with 2019, see the table of Revenue Procedures set out under . Provisions relating to inflation adjustment of items in this section for years before 2019 were contained in the following:
2018—Revenue Ruling 2018–11.
2017—Revenue Ruling 2016–30.
2016—Revenue Ruling 2015–24.
2015—Revenue Ruling 2014–30.
2014—Revenue Ruling 2013–23.
2013—Revenue Ruling 2012–33.
2012—Revenue Ruling 2011–27.
2011—Revenue Ruling 2010–30.
2010—Revenue Ruling 2010–2.
2009—Revenue Ruling 2008–52.
2008—Revenue Ruling 2008–3.
2007—Revenue Ruling 2007–4.
2006—Revenue Ruling 2005–76.
2005—Revenue Ruling 2004–107.
2004—Revenue Ruling 2003–119.
2003—Revenue Ruling 2002–79.
2002—Revenue Ruling 2001–65.
2001—Revenue Ruling 2000–55.
2000—Revenue Ruling 99–50.
1999—Revenue Ruling 98–58.
1998—Revenue Ruling 97–56.
1997—Revenue Ruling 96–63.
1996—Revenue Ruling 96–4.