Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 61-80

1961-1 C.B. 397

Sec. 1037

IRS Headnote

Under section 1037(a) of the Internal Revenue Code of 1954, gain or loss realized from the exchange of 2 1/2 percent Treaury Bonds of 1963 solely for 3 % p3/8 percent Treasury Bonds of 1966 will not be recognized.

Full Text

Rev. Rul. 61-80

The 3 3/8 percent Treasury Bonds of 1966 which were offered by the Secretary of the Treasury in Treasury Department Circular No. 1058, dated March 20, 1961, 26 F.R. 2529, were issued in exchange for 2 1/2 percent Treasury Bonds of 1963, dated December 15, 1954, due August 15, 1963.

The income derived from those bonds is subject to all taxes imposed under the Internal Revenue Code of 1954. The bonds are subject to estate, inheritance, gift or other excise taxes, whether Federal or State, but are exempt from all taxation now or hereafter imposed on the principal or interest thereof by any State, or any possession of the United States, or by any local taxing authority.

The bonds will be acceptable to secure deposits of public moneys. They will not be acceptable in payment of taxes.

Under the authority of section 1037(a) of the Code, the Secretary of the Treasury has declared that no gain or loss shall be recognized for Federal income tax purposes upon the exchange with the United States of the 2 1/2 percent Treasury Bonds of 1963, due August 15, 1963, solely for the 3 3/8 percent Treasury Bonds of 1966. D.C. No. 1058.

Gain or loss, if any, upon the obligations surrendered in this exchange will be taken into account upon the disposition or redemption of the new obligations.