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TITLE 26-INTERNAL REVENUE CODE Any rate prescribed for determining whether there is total unstated interest for purposes of subparagraph (B) shall be at least one per- centage point lower than the rate prescribed for purposes of subsection (b)(2). (2) Treatment of evidence of indebtedness For purposes of this section, an evidence of indebtedness of the purchaser given in consid- eration for the sale or exchange of property shall not be considered a payment, and any payment due under such evidence of indebt- edness shall be treated as due under the con- tract for the sale or exchange. (d) Payments that are indefinite as to time, liability, or amount In the case of a contract for the sale or ex- change of property under which the liability for, or the amount or due date of, any portion of a payment cannot be determined at the time of the sale or exchange, this section shall be separately applied to such portion as if it (and any amount of interest attributable to such portion) were the only payments due under the contract; and such determinations of liability, amount, and due date shall be made at the time payment of such portion is made. (e) Change in terms of contract If the liability for, or the amount or due date of, any payment (including interest) under a contract for the sale or exchange of property is changed, the "total unstated interest" under the contract shall be recomputed and allocated (with adjustment for prior interest (including unstated interest) payments) under regulations prescribed by the Secretary. (f) Exceptions and limitations (1) Sales price of $3,000 or less This section shall not apply to any payment on account of the sale or exchange of proper- ty if it can be determined at the time of such sale or exchange that the sales price cannot exceed $3,000. (2) Carrying charges In the case of the purchaser, the tax treat- ment of amounts paid on account of the sale or exchange of property shall be made with- out regard to this section if any such amounts are treated under section 163(b) as if they in- cluded interest. (3) Treatment of seller In the case of the seller, the tax treatment of any amounts received on account of the sale or exchange of property shall be made without regard to this section if all of the gain, if any, on such sale or exchange would be considered as ordinary income. (4) Sales or exchanges of patents This section shall not apply to any pay- ments made pursuant to a transfer described in section 1235(a) (relating to sale or ex- change of patents). (5) Annuities This section shall not apply to any amount the liability for which depends in whole or in part on the life expectancy of one or more in- dividuals and which constitutes an amount re- ceived as an annuity to which section '72 ap- plies. (Added Pub. L. 88-272, title II, § 224(a), Feb. 26, 1964, 78 Stat. 77, and amended Pub. L. 94-455, title XIX, §§ 1901(b)(3)(B), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1792, 1834.) AMENDMENTS 1976-Subsec. (b). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". Subsec. (c)(1)(B). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". Subsec. e). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". Subsec. (f)(3). Pub. L. 94-455, § 1901(b)(3)(B). substi- tuted "all of the gain, if any, on such" for "no part of any gain on such" and "ordinary income" for gain from the sale or exchange of property other than a capital asset". EFCTIVE DATE OF 1976 AMENDMENT Amendment of subsec. (f)(3) by section 1901(b)(3)(B) of Pub. L. 94-455 effective for taxable years beginning after Dec. 31. 1976, see section 1901(d) of Pub. L. 94- 455, set out as an Effective Date of 1976 Amendment note under section 2 of this title. EFECrIVE DATE Section applicable to payments made after Dec. 31, 1963, on account of sales or exchanges of property after June 30, 1963, other than a sale or exchange pur- suant to written contract, including an Irrevocable written option, entered into before July 1, 1963, see section 224(d) of Pub. L. 88-272, set out as an Effective Date of 1964 Amendment note under section 163 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 4942 of this title. Subchapter F-Exempt Organizations Part I. General rule. II. Private foundations. III. Taxation of business income of certain exempt organizations. IV. Farmers' cooperatives. V. Shipowners' protection and indemnity associ. ations. VI. Political organizations. VII. Certain homeowners associations. AmENDMENTS 1976-Pub. L. 94-455, title XXI, § 2101(d), Oct. 4, 1976, 90 Stat. 1899. added part VII heading. 1975-Pub. L. 93-625, § 10(d), Jan. 3. 1975, 88 Stat. 2119, added part VI heading. 1969-Pub. L. 91-172, title I, § 101(j)(58). Dec. 30, 1969, 83 Stat. 532, added Part II heading, and redesig- nated former Parts II. III and IV as Parts III, IV and V. respectively. SuncHAPma REFERRED TO IN OTHER SECTIONs This subchapter is referred to in section 532, 542. 552 of this title. PART I-GENERAL RULE Sec. 501. Exemption from tax on corporations, certain trusts, etc. 502. Feeder organizations. 503. Requirements for exemption. 504 Status after organization ceases to qualify for ex- emption under section 501(c)(3) because of sub- stantial lobbying. AMENDMENTS 1976-Pub. L. 94-455, title XIII, § 1307(d)(3)(B), Oct, 4. 1976, 90 Stat. 1728, added item 504. Page 374 t 483