Title 26 — Internal Revenue CodeRelease 119-73not60

§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

Last updated Apr 5, 2026|Official source

Summary

If you sell or otherwise transfer a "registration-required obligation" that is not in "registered form," any profit from that sale is treated as ordinary income instead of a capital gain. That rule does not apply if the obligation’s issuance was taxed under section 4701. "Registration-required obligation" is a term defined in section 163(f)(2). "Registered form" has the same meaning as in section 163(f).

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 5, 2026

Release point: 119-73not60