26 U.S.C. § 453A — Special rules for nondealers

Source [8] (b) Installment obligations to which section applies › (2) Special rule for interest payments

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For purposes of subsection (a)(1), this section shall apply to an obligation described in paragraph (1) arising during a taxable year only if— (A) such obligation is outstanding as of the close of such taxable year, and (B) the face amount of all such obligations held by the taxpayer which arose during, and are outstanding as of the close of, such taxable year exceeds $5,000,000. Except as provided in regulations, all persons treated as a single employer under subsection (a) or (b) of section 52 shall be treated as one person for purposes of this paragraph and subsection (c)(4).

(b) Installment obligations to which section applies › (3) Exception for personal use and farm property An installment obligation shall not be treated as described in paragraph (1) if it arises from the disposition— (A) by an individual of personal use property (within the meaning of section 1275(b)(3)), or (B) of any property used or produced in the trade or business of farming (within the meaning of section 2032A(e)(4) or (5)).

(b) Installment obligations to which section applies › (4) Special rule for timeshares and residential lots An installment obligation shall not be treated as described in paragraph (1) if it arises from a disposition described in section 453(l)(2)(B), but the provisions of section 453(l)(3) (relating to interest payments on timeshares and residential lots) shall apply to such obligation.

(c) Interest on deferred tax liability For purposes of paragraph (1), all sales or exchanges which are part of the same transaction (or a series of related transactions) shall be treated as 1 sale or exchange.

(c) Interest on deferred tax liability › (1) In general If an obligation to which this section applies is outstanding as of the close of any taxable year, the tax imposed by this chapter for such taxable year shall be increased by the amount of interest determined in the manner provided under paragraph (2).

(c) Interest on deferred tax liability › (2) Computation of interest For purposes of paragraph (1), the interest for any taxable year shall be an amount equal to the product of— (A) the applicable percentage of the deferred tax liability with respect to such obligation, multiplied by (B) the underpayment rate in effect under section 6621(a)(2) for the month with or within which the taxable year ends.

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