Personal Use Property OID Deferral

§ 1275. Other definitions and special rules(a) DefinitionsFor purposes of this subpart—(1) Debt instrument(A) In generalExcept as provided in subparagraph (B), the term “debt instrument” means a bond, debenture, note, or certificate or other evidence of indebtedness. (B) Exception for certain annuity contractsThe term “debt instrument” shall not include any annuity contract to which section 72 applies and which—(i) depends (in whole or in substantial part) on the life expectancy of 1 or more individuals, or (ii) is issued by an insurance company subject to tax under subchapter L (or by an entity described in section 501(c) and exempt from tax under section 501(a) which would be subject to tax under subchapter L were it not so exempt)—(I) in a transaction in which there is no consideration other than cash or another annuity contract meeting the requirements of this clause, (II) pursuant to the exercise of an election under an insurance contract by a beneficiary thereof on the death of the insured party under such contract, or (III) in a transaction involving a qualified pension or employee benefit plan. (2) Issue date(A) Publicly offered debt instrumentsIn the case of any debt instrument which is publicly offered, the term “date of original issue” means the date on which the issue was first issued to the public. (B) Issues not publicly offered and not issued for propertyIn the case of any debt instrument to which section 1273(b)(2) applies, the term “date of original issue” means the date on which the debt instrument was sold by the issuer. (C) Other debt instrumentsIn the case of any debt instrument not described in subparagraph (A) or (B), the term “date of original issue” means the date on which the debt instrument was issued in a sale or exchange. (3) Tax-exempt obligationThe term “tax-exempt obligation” means any obligation if—(A) the interest on such obligation is not includible in gross income under section 103, or (B) the interest on such obligation is exempt from tax (without regard to the identity of the holder) under any other provision of law. (4) Treatment of obligations distributed by corporationsAny debt obligation of a corporation distributed by such corporation with respect to its stock shall be treated as if it had been issued by such corporation for property. (b) Treatment of borrower in the case of certain loans for personal use(1) Sections 1274 and 483 not to applyIn the case of the obligor under any debt instrument given in consideration for the sale or exchange of property, sections 1274 and 483 shall not apply if such property is personal use property. (2) Original issue discount deducted on cash basis in certain casesIn the case of any debt instrument, if—(A) such instrument—(i) is incurred in connection with the acquisition or carrying of personal use property, and (ii) has original issue discount (determined after the application of paragraph (1)), and