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Publication 510 2001 Tax Year

Obligations Not in Registered Form

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This is archived information that pertains only to the 2001 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

Tax is imposed on any person who issues a registration-required obligation not in registered form. The tax is:

  • 1% of the principal of the obligation, multiplied by
  • The number of calendar years (or portions of calendar years) during the period starting on the date the obligation was issued and ending on the date it matures.

A registration-required obligation is any obligation other than one that meets any of the following conditions.

  1. It is issued by a natural person.
  2. It is not of a type offered to the public.
  3. It has a maturity (at issue) of not more than one year.
  4. It can only be issued to a foreign person.

For item (4), if the obligation is not in registered form, the interest on the obligation must be payable only outside the United States and its possessions. Also, the obligation must state on its face that any U.S. person who holds it shall be subject to limits under the U.S. income tax laws.

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