Secondary Market Tax Amendments of 1986

Summary

Secondary Market Tax Amendments of 1986 - Amends the Internal Revenue Code to revise the original issue discount rules concerning mortgage related debt. Provides that the original issue discount of such debt shall be determined by reference to changes in the obligation's adjusted issue price. Sets forth the method of calculating such adjusted issue price. Authorizes the issuance of collateralized mortgage securities (CMS) as multiple-class mortgage related securities. Provides that the issuance of a CMS shall be treated as a sale of the loans backing the securities. Provides that the holder, not the issuer or issue, shall be subject to tax. Sets forth rules for the taxation of regular interest and residual interests in such CMSs. Sets forth basis adjustment rules for the holders of a CMS. Provides that the sale or exchange of an interest in a CMS shall be treated as a gain or loss as if the interest were debt obligation. Sets forth definitions and rules for the tax treatment of outside discount and premium related to a CMS. Specifies prohibited transactions and imposes a penalty tax on such transactions. Permits the sale of an issue's assets, and the distribution of cash to holders of interests, in a qualifying complete liquidation without incurring tax at the issue level. Sets forth compliance and administrative provisions.

This text is taken from the official record. PoliticalRepo does not editorialize.

Timeline

1. 17 December 1985

   Introduced

   Read twice and referred to the Committee on Finance.

   Source: IntroReferral

2. 17 December 1985

   Introduced

   Introduced in Senate

   Source: IntroReferral

3. 6 January 1986

   Committee

   Committee on Finance requested executive comment from OMB, Treasury Department.

   Source: Committee

4. 31 January 1986

   Committee

   Subcommittee on Taxation and Debt Management. Hearings held. Hearings printed: S.Hrg. 99-711.

   Source: Committee

Votes

No vote records are attached yet.

Versions

No version snapshots stored. Document URLs remain at the source.

Documents

1 official file

• Introduced in Senate

  summary · EN · 17 December 1985

  Open at official source

Sponsors

• Sen. Chafee, John H. [R-RI] · R · Sponsor
• Sen. Bentsen, Lloyd M. [D-TX] · D · Sponsor
• Sen. Moynihan, Daniel Patrick [D-NY] · D · Cosponsor
• · ssfi00 · Standing

Related records

No cross-record relationships stored yet.