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42 Tax L. Rev. 1 (1986-1987)
The Time Value of Money Rules

handle is hein.journals/taxlr42 and id is 11 raw text is: The Time Value of Money Rules I. BAsic CONCEPTS OF THE TIME VALUE OF MONEY ............. 10 A. Interest Expressed or Implied in Every Deferred Payment Transaction ......................................... 11 B. Compounding of Interest .............................. 13 C. Constant Interest Method .............................. 15 D. Present Values ...................................... 15 E. Counting Conventions ................................ 18 IL ORIGINAL IssuE DISCOUNT ................................. 20 A. Introductory ........................................ 20 B. Debt Instrument ..................................... 21 C. Issue Price ......................................... 22 1. Publicly Offered Instruments Issued for Cash ............ 22 2. Other Instruments Issued for Cash .................... 23 3. Instruments Issued in Exchanges Involving Publicly Traded Securities ........................................ 26 4. Other Instruments Issued in Sales and Exchanges of Property ......................................... 28 5. Investment Units Including Debt Instruments ........... 29 6. Obligations Issued in Reorganizations .................. 30 a. Issue Price .................................... 30 b. Collateral Consequences .......................... 34 7. Issue Price of Corporate Obligations Distributed to Shareholders ..................................... 35 D. Stated Redemption Price at Maturity ..................... 37 1. Qualified Periodic Interest .......................... 37 2. Payments Other Than Qualified Periodic Interest ........ 40 E. Original Issue Discount (OlD) .......................... 41 F. Other Definitions and Concepts ......................... 42 1. Issue Date ....................................... 42 2. Issue and Aggregation Rules ....................... 42 G. OID Accruals on Obligations Issued After July 1, 1982 ...... 43 1. Introductory ..................................... 43 2. Identifying the Taxpayers .......................... 45 3. Accrual Period ................................... 45 4. Adjusted Issue Price .............................. 48 5. Yield to Maturity ................................. 48 a. Generally ..................................... 48 b. Instruments Subject to Puts and Calls .............. 50 6. Periodical Accruals ............................... 52 a. Generally .................................... 52 b. Short Periods ................................. 53 (1) Generally ................................. 53 (2) Preissue Accruals of Stated Interest ............ 55 1 Imaged with the Permission of N.Y.U. Tax Law Review