[Code of Federal Regulations]
[Title 26, Volume 11]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.1001-4]

[Page 26-27]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1--INCOME TAXES--Table of Contents
 
Sec. 1.1001-4  Modifications of certain notional principal contracts.

    (a) Dealer assignments. For purposes of Sec. 1.1001-1(a), the 
substitution of a new party on an interest rate or commodity swap, or 
other notional principal contract (as defined in Sec. 1.446-3(c)(1)), is 
not treated as a deemed exchange by the nonassigning party of the 
original contract for a modified contract that differs materially either 
in kind or in extent if--
    (1) The party assigning its rights and obligations under the 
contract and the

[[Page 27]]

party to which the rights and obligations are assigned are both dealers 
in notional principal contracts, as defined in Sec. 1.446-3(c)(4)(iii); 
and
    (2) The terms of the contract permit the substitution.
    (b) Effective date. This section applies to assignments of interest 
rate swaps, commodity swaps, and other notional principal contracts 
occurring on or after September 23, 1996.

[T.D. 8763, 63 FR 4396, Jan. 29, 1998]