§ 1.171-2T - Amortization of bond premium (temporary).

(a)(1) through (a)(4)(i)(B) [Reserved] For further guidance, see §1.171-2(a)(1) through (a)(4)(i)(B).

(C) Carryforward in holder's final accrual period—(1) If there is a bond premium carryforward determined under §1.171-2(a)(4)(i)(B) as of the end of the holder's accrual period in which the bond is sold, retired, or otherwise disposed of, the holder treats the amount of the carryforward as a bond premium deduction under section 171(a)(1) for the holder's taxable year in which the sale, retirement, or other disposition occurs. For purposes of §1.1016-5(b), the holder's basis in the bond is reduced by the amount of bond premium allowed as a deduction under this paragraph (a)(4)(i)(C)(1).

(2) Effective/applicability date. Notwithstanding §1.171-5(a)(1), paragraph (a)(4)(i)(C)(1) of this section applies to a bond acquired on or after January 4, 2013. A taxpayer, however, may rely on paragraph (a)(4)(i)(C)(1) of this section for a bond acquired before that date.

(ii) through (c) [Reserved] For further guidance, see §1.171-2(a)(4)(ii) through (c).

(d) Expiration date. The applicability of this section expires on or before December 31, 2015.

[T.D. 9609, 78 FR 667, Jan. 4, 2013]