Code of Federal Regulations Title 26. Internal Revenue § 26.1.149(g)–1 Hedge bonds

(a) Certain definitions. Except as otherwise provided, the definitions set forth in § 1.148–1 apply for purposes of section 149(g) and this section. In addition, the following terms have the following meanings:

Reasonable expectations means reasonable expectations (as defined in § 1.148–1), as modified to take into account the provisions of section 149(f)(2)(B).

Spendable proceeds means net sale proceeds (as defined in § 1.148–1).

(b) Applicability of arbitrage allocation and accounting rules.Section 1.148–6 applies for purposes of section 149(g), except that an expenditure that results in the creation of replacement proceeds (other than amounts in a bona fide debt service fund or a reasonably required reserve or replacement fund) is not an expenditure for purposes of section 149(g).

(d) Effective date. This section applies to bonds issued after June 30, 1993 to which §§ 1.148–1 through 1.148–11 apply. In addition, this section applies to any issue to which the election described in § 1.148–11(b)(1) is made.