Debt-for-debt exchange
Debt-for-debt exchange(i) Rule. A debt instrument issued in a debt-for-debt exchange, including a deemed exchange under 1.10013, will not be treated as the subject of a recent sales transaction for purposes of section 1274(b)(3)(B)(ii)(I) even if the debt instrument exchanged for the newly issued debt instrument was recently acquired prior to the exchange. Therefore, the issue price of the debt instrument will not be determined under section 1274(b)(3). However, if the debt instrument or the property for which the debt instrument is issued is publicly traded within the meaning of 1.12732(f), the rules of 1.12732 will apply to determine the issue price of the debt instrument.
(i)Rule.A debt instrument issued in a debt-for-debt exchange, including a deemed exchange under 1.10013, will not be treated as the subject of a recent sales transaction for purposes of section 1274(b)(3)(B)(ii)(I) even if the debt instrument exchanged for the newly issued debt instrument was recently acquired prior to the exchange. Therefore, the issue price of the debt instrument will not be determined under section 1274(b)(3). However, if the debt instrument or the property for which the debt instrument is issued is publicly traded within the meaning of 1.12732(f), the rules of 1.12732 will apply to determine the issue price of the debt instrument.