Internal Revenue Service
Revenue Ruling
TaxLinks.com
smRev. Rul. 65-35
1965-1 C.B. 358
Sec. 1031
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 3 1/2 percent Treasury Notes of Series B-1965; 4 percent Treasury Notes of Series E-1965; 3 5/8 percent Treasury Notes of Series B-1966; 3 7/8 percent Treasury Notes of Series C-1966; 3 3/4 percent Treasury Bonds of 1966; 3 3/4 Treasury Notes of Series A-1967; 3 5/8 percent Treasury Bonds of 1967, as offered by Treasury Department Circulars, Public Debt Series Nos. 13-64, 14-64, and 15-64, dated December 31, 1964.
However, gain or loss, if any, upon the exchange of the 2 5/8 percent Treasury Bonds of 1965, as offered in the Circulars, must be fully recognized.
Full Text
Rev. Rul. 65-35
In the Treasury Department Circulars listed below, the Secretary of the Treasury offered the Treasury Bonds specified in exchange for other Treasury securities as follows:
Treasury Department Circular, Public Debt Series No. 13-64, dated
December 31, 1964, 30 F.R. 160.
Bonds offered Exchange accepted
4 percent Treasury Bonds of 1970 2 5/8 percent Treasury Bonds of
at 99.40 percent of their 1965, dated June 15, 1958, due
face value. February 15, 1965.
4 percent Treasury Bonds of 1970 3 1/2 percent Treasury Notes of
at 99.55 percent of their Series B-1965, dated November
face value. 15, 1962, due November 15, 1965.
4 percent Treasury Bonds of 1970 4 percent Treasury Notes of
at 99.10 percent of their Series E- 1965, dated May 15,
face value. 1964, due November 15, 1965.
4 percent Treasury Bonds of 1970 3 5/8 percent Treasury Notes
at 99.60 percent of their of Series B-1966, dated May 15,
face value. 1962, due February 15, 1966.
4 percent Treasury Bonds of 1970 3 7/8 percent Treasury Notes of
at 99.30 percent of their Series C-1966, dated August 15,
face value. 1964, due February 15, 1966.
4 percent Treasury Bonds of 1970 3 3/4 percent Treasury Bonds of
at 99.50 percent of their 1966, dated November 15, 1960,
face value. due May 15, 1966.
4 percent Treasury Bonds of 1970 3 3/4 percent Treasury Notes of
at 99.95 percent of their Series A-1967, dated September
face value. 15, 1962, due August 15, 1967.
4 percent Treasury Bonds of 1970 3 5/8 percent Treasury Bonds
at 100.30 percent of their of 1967, dated March 15, 1961,
face value. due November 15, 1967.
Treasury Department Circular, Public Debt Series No. 14-64, dated
December 31, 1964, 30 F.R. 161.
Bonds offered Exchange accepted
4 1/8 percent Treasury Bonds of 2 5/8 percent Treasury Bonds of
1974 at 99.35 percent of their 1965, dated June 15, 1958, due
face value. February 15, 1965.
4 1/8 percent Treasury Bonds of 3 1/2 percent Treasury Notes of
1974 at 99.50 percent of their Series B-1965, dated November
face value. 15, 1962, due November 15, 1965.
4 1/8 percent Treasury Bonds of 4 percent Treasury Notes of
1974 at 99.05 percent of their Series E-1965, dated May 15,
face value. 1964, due November 15, 1965.
4 1/8 percent Treasury Bonds of 3 5/8 percent Treasury Notes of
1974 at 99.55 percent of their Series B-1966, dated May 15,
face value. 1962, due February 15, 1966.
4 1/8 percent Treasury Bonds of 3 7/8 percent Treasury Notes of
1974 at 99.25 percent of their Series C-1966, dated August
face value. 15, 1964, due February 15, 1966.
4 1/8 percent Treasury Bonds of 3 3/4 percent Treasury Bonds of
1974 at 99.45 percent of their 1966, dated November 15, 1960,
face value. due May 15, 1966.
4 1/8 percent Treasury Bonds of 3 3/4 percent Treasury Notes of
1974 at 99.90 percent of their Series A-1967, dated September
face value. 15, 1962, due August 15, 1967.
4 1/8 percent Treasury Bonds of 3 5/8 percent Treasury Bonds of
1974 at 100.25 percent of their 1967, dated March 15, 1961,
face value. due November 15, 1967.
Treasury Department Circular, Public Debt Series No. 15-64, dated
December 31, 1964, 30 F.R. 163
Bonds offered Exchange accepted
4 1/4 percent Treasury Bonds of 2 5/8 percent Treasury Bonds of
1987-92 at 100.25 percent of 1965, dated June 15, 1958, due
their face value. February 15, 1965.
4 1/4 percent Treasury Bonds of 3 1/2 percent Treasury Notes of
1987-92 at 100.40 percent of Series B-1965, dated November
their face value. 15, 1962, due November 15, 1965.
4 1/4 percent Treasury Bonds of 4 percent Treasury Notes of
1987-92 at 99.95 percent of Series E-1965, dated May 15,
their face value. 1964, due November 15, 1965.
4 1/4 percent Treasury Bonds of 3 5/8 percent Treasury Notes of
1987-92 at 100.45 percent of Series B-1966, dated May 15,
their face value. 1962, due February 15, 1966.
4 1/4 percent Treasury Bonds of 3 7/8 percent Treasury Notes of
1987-92 at 100.15 percent of Series C-1966, dated August
their face value. 15, 1964, due February 15, 1966.
4 1/4 percent Treasury Bonds of 3 3/4 percent Treasury Bonds of
1987-92 at 100.35 percent of 1966, dated November 15, 1960,
their face value. due May 15, 1966.
4 1/4 percent Treasury Bonds of 3 3/4 percent Treasury Notes of
1987-92 at 100.80 percent of Series A-1967, dated September
their face value. 15, 1962, due August 15, 1967.
4 1/4 percent Treasury Bonds of 3 5/8 percent Treasury Bonds of
1987-92 at 101.15 percent of 1967, dated March 15, 1961,
their face value. due November 15, 1967.
The income derived from the bonds issued in exchange 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. The bonds offered by Department Circulars, Public Debt Series Nos. 14-64 and 15-64 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. However, the bonds offered in Department Circular, Public Debt Series No. 13-64, will not be acceptable in payment of taxes.
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 last seven issues enumerated in each circular solely for the 4 percent Treasury Bonds of 1970, the 4 1/8 percent Treasury Bonds of 1974, and the 4 1/4 percent Bonds of 1987-92, as offered by Department Circulars, Public Debt Series Nos. 13-64, 14-64, and 15-64.
However, section 1031(b) of the Code requires the recognition of any gain realized on the exchange to the extent that money is received by the security holder in connection with the exchange. The payment due to the subscriber on account of the issue price of the bonds to be issued is the maximum amount of gain, if any, recognized at the time of the exchange.
To the extent not recognized at the time of the exchange, gain or loss, if any, upon the obligations surrendered in exchange will be taken into account upon the disposition or redemption of the new obligations.
Gain or loss, if any, upon the exchange with the United States of the 2 5/8 percent Treasury Bonds of 1965 enumerated in each circular solely for the 4 percent Treasury Bonds of 1970, the 4 1/8 percent Treasury Bonds of 1974, and the 4 1/4 percent Treasury Bonds of 1987-92 must be fully recognized.
In addition, each subscriber requesting registered bonds is required to furnish his social security number or employer identification number as required on tax returns or other documents submitted to the Internal Revenue Service.