Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 62-26

1962-1 C.B. 134

Sec. 1037

IRS Headnote

Under section 1037(a) of the Internal Revenue Code of 1954, no gain or loss will be recognized upon the exchange of the 2 1/2 percent Treasury Bonds of 1965-70 or the 2 1/2 percent Treasury Bonds of 1966-71 solely for the 3 1/2 percent Treasury Bonds of 1980 as offered by Department Circular No. 1065, 26 F.R. 8646.

Full Text

Rev. Rul. 62-26

In Treasury Department Circular No. 1065, dated Sepbember 11, 1961, 26 F.R. 8646, the Secretary of the Treasury offered 3 1/2 percent Treasury Bonds of 1980 in exchange for other Treasury Bonds as follows:

(1) at 102.25 percent of their face value for 2 1/2 percent Treasury Bonds of 1965-70, dated February 1, 1944, due March 15, 1970; or

(2) at 103.50 percent of their face value for 2 1/2 percent Treasury Bonds of 1966-71, dated December 1, 1944, due March 15, 1971.

The income derived from the 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 of the possessions of the United States, or by any local taxing authority.

The bonds will be acceptable to secure deposits of public moneys. They may, upon the death of the owner, be redeemed at par, plus accrued interest to date of payment, in payment of Federal estate taxes due from the deceased owner's estate.

Pursuant to the provisions 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 2 1/2 percent Treasury Bonds of 1965-70 or 2 1/2 percent Treasury Bonds of 1966-71 solely for the 3 1/2 percent Treasury Bonds of 1980 as offered by Department Circular No. 1065, supra . Gain or loss, if any upon the obligations surrendered in exchange will be taken into account upon the disposition or dedemption of the new obligations.