[Code of Federal Regulations]
[Title 26, Volume 2]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.148-1A]

[Page 730]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1--INCOME TAXES--Table of Contents
 
Sec. 1.148-1A  Definitions and elections.

    (a) [Reserved]. For guidance see Sec. 1.148-1.
    (b) Certain definitions.
    Investment-type property. See Sec. 1.148-1(b). Investment-type 
property also includes a contract that would be a hedge (within the 
meaning of Sec. 1.148-4(h)) except that it contains a significant 
investment element.
    (c) through (c)(4)(i) [Reserved]. For guidance see Sec. 1.148-1.
    (c)(4)(ii) Bonds financing a working capital reserve--(A) In 
general. Except as otherwise provided in Sec. 1.148-1(c)(4)(ii)(B), 
replacement proceeds arise to the extent a working capital reserve is, 
directly or indirectly, financed with the proceeds of the issue 
(regardless of the expenditure of proceeds of the issue). Thus, for 
example, if an issuer that does not maintain a working capital reserve 
borrows to fund such a reserve, the issuer will have replacement 
proceeds. To determine the amount of a working capital reserve 
maintained, an issuer may use the average amount maintained as a working 
capital reserve during annual periods of at least one year, the last of 
which ends within a year before the issue date. For example, the amount 
of a working capital reserve may be computed using the average of the 
beginning or ending monthly balances of the amount maintained as a 
reserve (net of unexpended gross proceeds) during the one year period 
preceding the issue date.

[T.D. 8538, 59 FR 24041, May 10, 1994. Redesignated by T.D. 8718, 62 FR 
25507, May 9, 1997]