Title 26 — Internal Revenue CodeRelease 119-73
§1287 Denial of Capital Gain Treatment for Gains on Certain Obligations Not in Registered Form
Title 26 › Subtitle Subtitle A— Income Taxes › Chapter 1— NORMAL TAXES AND SURTAXES › Subchapter P— Capital Gains and Losses › Part V— SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS › Subpart D— Miscellaneous Provisions › § 1287
Summary
If a bond or similar obligation was required to be issued in registered form but is not, any gain when you sell or dispose of it is taxed as ordinary income instead of capital gain, unless the bond's issuance was already subject to a special tax.
Full Legal Text
Title 26, §1287
Internal Revenue Code — Source: USLM XML via OLRC
(a)If any registration-required obligation is not in registered form, any gain on the sale or other disposition of such obligation shall be treated as ordinary income (unless the issuance of such obligation was subject to tax under section 4701).
(b)For purposes of subsection (a)—
(1)The term “registration-required obligation” has the meaning given to such term by section 163(f)(2).
(2)The term “registered form” has the same meaning as when used in section 163(f).
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Amendments
2010—Subsec. (b)(1). Pub. L. 111–147 struck out “except that clause (iv) of subparagraph (A), and subparagraph (B), of such section shall not apply” before period.
Statutory Notes and Related Subsidiaries
Effective Date
of 2010 AmendmentAmendment by Pub. L. 111–147 applicable to obligations issued after the date which is 2 years after Mar. 18, 2010, see section 502(f) of Pub. L. 111–147, set out as a note under section 149 of this title.
Effective Date
Section applicable to taxable years ending after July 18, 1984, except as otherwise provided, see section 44 of Pub. L. 98–369, set out as a note under section 1271 of this title.
Reference
Citations & Metadata
Citation
26 U.S.C. § 1287
Title 26 — Internal Revenue Code
Last Updated
Apr 6, 2026
Release point: 119-73