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Future regulations to provide market discount not includible in income

Future regulations to provide market discount

The IRS today released an advance version of Notice 2018-80 announcing that the IRS and Treasury Department intend to issue proposed regulations to address the applicability of section 451(b) to market discount as defined under section 1278(a)(2).


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Notice 2018-80 [PDF 12 KB] states that the future proposed regulations will provide that accrued market discount is not includible in income under section 451(b).

Section 451(b) was added to the Code by the new tax law in the United States (Pub. L. No. 115-97, enacted December 22, 2017). Today’s notice reports that taxpayers have requested guidance as to whether market discount is includible in income under section 451(b). Hence, the future proposed regulations will aim to clarify that accrued market discount is not includible in income (with the guidance to be effective as of January 1, 2018).

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