Market Discount. If you purchase a note at a price that is lower than the note’s stated principal amount by 0.25% or more of the stated principal amount multiplied by the number of remaining whole years to maturity, the note will be considered to bear “market discount” in an amount equal to such difference in your hands. In this case, any principal payments on, or any gain that you realize on the disposition of, the note generally will be treated as ordinary interest income to the extent of the market discount that accrued on the note during your holding period. In addition, you may be required to defer the deduction of all or a portion of the interest paid on any indebtedness that you incurred or continued to purchase or carry the note. In general, market discount will be treated as accruing ratably, or, at your election, under a constant-yield method, over the remaining term of the note. You must accrue market discount on a note in euros. The amount that you will be required to include in income in respect of accrued market discount will be the U.S. dollar value of the accrued amount, generally calculated at the exchange rate in effect on the date that you dispose of the note. You may elect to include market discount in gross income currently as it accrues (on either a ratable or constant-yield basis), in lieu of treating a portion of any gain realized on a sale of the note as ordinary income. If you elect to include market discount on a current basis, the interest deduction deferral rule described above will not apply. If you do make such an election, it will apply to all market discount debt instruments that you acquire on or after the first day of the first taxable year to which the election applies. The election may not be revoked without the consent of the Internal Revenue Service. Any accrued market discount on a note that is currently includible in income will be translated into U.S. dollars at the average exchange rate for the accrual period (or portion thereof within the holder’s taxable year).
Market Discount. If a U.S. Holder purchases a debt security, other than a Short-Term Note, for an amount that is less than its stated redemption price at maturity or, in the case of an Original Issue Discount Note, its adjusted issue price, the amount of the difference will generally be treated as “market discount” for U.S. federal income tax purposes, unless such difference is less than a specified de minimis amount. Under the market discount rules, a U.S. Holder will be required to treat any principal payment on, or any gain on the sale, exchange, retirement or other disposition of, a debt security as ordinary income to the extent of the market discount which has not previously been included in income and is treated as having accrued on such debt security at the time of such payment or disposition. In addition, the U.S. Holder may be required to defer, until the maturity of the debt security or its earlier disposition in a taxable transaction, the deduction of all or a portion of the interest expense on any indebtedness incurred or continued to purchase or carry such debt security (in an amount not exceeding the accrued market discount). Any market discount will be considered to accrue ratably during the period from the date of acquisition to the maturity date of the debt security, unless the U.S. Holder elects to accrue on a constant yield method. A U.S. Holder of a debt security may elect to include market discount in income currently as it accrues (on either a ratable or constant yield method), in which case the rule described above regarding deferral of interest deductions will not apply.
Market Discount. If you hold Outstanding Notes acquired at a market discount, you generally will be required to treat a portion of any gain that you recognize on the exchange of such Outstanding Notes for New Notes and cash as ordinary income to the extent attributable to any accrued market discount that has not previously been included in income. Such market discount should be treated as foreign source income and as “passive category income” or, in the case of certain U.S. Holders, “general category income,” for U.S. foreign tax credit limitation purposes. Non-Recapitalization If the exchange of Outstanding Notes for New Notes is not treated as a recapitalization, you will recognize gain or loss equal to the difference, if any, between the amount realized on the exchange and your adjusted tax basis in the Outstanding Notes. The amount realized will be the sum of the cash received (excluding amounts attributable to accrued and unpaid interest, discussed below) and the issue price of the New Notes (discussed below). Subject to the discussion under “Non-Recapitalization — Market Discount,” below, any gain or loss will be capital gain or loss, and will be long-term capital gain or loss if your holding period for the Outstanding Notes is more than one year at the time of the exchange. The deductibility of capital losses is subject to limitations. Any gain or loss recognized on the exchange generally will be treated as U.S. source gain or loss for U.S. foreign tax credit limitation purposes. If the exchange of Outstanding Notes for New Notes does not qualify as a recapitalization, your holding period for the New Notes will not include your holding period for the Outstanding Notes exchanged and will begin on the day after the exchange. Your initial tax basis in the New Notes will be the issue price of the New Notes on the date of the exchange.
Market Discount. If you hold Outstanding Notes acquired at a market discount, you generally will be required to treat a portion of any gain that you recognize on the exchange of such Outstanding Notes for New Notes and cash as ordinary income to the extent attributable to any accrued market discount that has not previously been included in income. Such market discount should be treated as foreign source income and as “passive category income” or, in the case of certain U.S. Holders, “general category income,” for U.S. foreign tax credit limitation purposes.
Market Discount. If you acquired your Outstanding Notes (other than at original issue) with a market discount (generally acquired at a non-de minimis discount from the stated principal amount) and the exchange of Outstanding Notes for New Notes qualifies as a recapitalization (as discussed above), such New Notes received by you in exchange for Outstanding Notes will be treated as acquired at a market discount if the stated principal amount of the New Notes exceeds your adjusted tax basis for the New Notes by more than a de minimis amount. If the New Notes are issued with original issue discount, then the New Notes received in exchange for Outstanding Notes will be treated as having market discount only to the extent that the issue price of the New Notes exceeds your carryover tax basis in the New Notes. Market discount accrues in addition to any OID. In contrast to OID, a U.S. Holder is not required to include market discount in income periodically over the term of the New Notes before receipt of the cash or other payment attributable to such income. Instead, any principal payment on the New Notes, and any gain recognized upon the sale, exchange, retirement or other disposition of an exchange note is required to be treated as ordinary income to the extent of the accrued market discount that has not previously been included in income. If you dispose of a New Note that has accrued market discount in a nonrecognition transaction in which you receive property the basis of which is determined in whole or in part by reference to the basis of the New Note (including a conversion of a New Note into common stock), the accrued market discount generally is includible in income at the time of such transaction only to the extent of the gain recognized. To the extent not included in income at the time of the nonrecognition transaction, the accrued market discount attaches to the property received and is recognized as ordinary income upon the disposition of such property. In general, the amount of market discount that has accrued is determined on a ratable basis, by allocating an equal amount of market discount to each day of every accrual period. You may, however, elect to determine the amount of accrued market discount allocable to any accrual period under the constant yield method. Any such election applies on a note-by-note basis and is irrevocable. You also may elect to include market discount in income currently as it accrues. Any such election applies to all debt instruments acqui...
Market Discount. Under the “market discount” provisions of sections 1276 through 1278 of the IRC, some or all of any gain realized by a U.S. Holder exchanging the debt instruments constituting its Allowed Claim may be treated as ordinary income (instead of capital gain), to the extent of the amount of “market discount” on the debt constituting the exchanged Claim. Any gain recognized by a U.S. Holder on the taxable disposition (determined as described above) of a Claim that was acquired with market discount should be treated as ordinary income to the extent of the market discount that accrued thereon while such debt instruments were considered to be held by the U.S. Holder (unless the U.S. Holder elected to include such market discount in its income as the market discount accrued). To the extent that a U.S. Holder exchanged Claims that were acquired by the U.S. Holder with market discount in exchange for other property pursuant to a tax-free or other reorganization transaction (other than a transaction described in section 351 of the IRC) for other property, any market discount that accrued on such exchanged Claims and was not recognized by the U.S. Holder may be required to be carried over to the property received therefor and any gain recognized by the U.S. Holder on the subsequent sale, exchange, redemption, or other disposition of such property may be treated as ordinary income to the extent of the accrued but unrecognized market discount with respect to the exchanged Claim. To the extent that a U.S. Holder exchanged Claims that were acquired by the U.S. Holder with market discount in exchange for other property pursuant to an exchange described in section 351 of the IRC, such U.S. Holder may be required to recognize gain treated as ordinary income on such exchange to the extent of the accrued but unrecognized market discount with respect to the exchanged Claim.
Market Discount. If a U.S. holder purchases a Note (other than a short-term Note) for an amount that is less than its stated redemption price at maturity or, in the case of an original issue discount Note, its adjusted issue price, the amount of the difference will be treated as market discount for U.S. federal income tax purposes, unless this difference is less than a specified de minimis amount, i.e., 1/4th of 1 percent of the stated redemption price at maturity multiplied by the number of complete years to maturity. A U.S. holder will be required to treat any principal payment (or, in the case of an original issue discount Note, any payment that does not constitute qualified stated interest) on, or any gain on the sale, exchange, retirement or other disposition of a Note, including dispositions in certain nonrecognition transactions, as ordinary income to the extent of the market discount accrued on the Note at the time of the payment or disposition unless this market discount has been previously included in income by the U.S. holder pursuant to an election by the holder to include market discount in income as it accrues, or pursuant to a constant yield election by the holder as described under "Taxation – United States Federal Income Taxation – Original Issue Discount" above. In addition, the U.S. holder may be required to defer, until the maturity of the Note or its earlier sale, exchange, retirement, or other disposition (including certain nontaxable transactions), the deduction of all or a portion of the interest expense on any indebtedness incurred or maintained to purchase or carry such Note. If a U.S. holder makes a constant yield election (as described under "Taxation – United States Federal Income Taxation – Original Issue Discount") for a Note with market discount, such election will result in a deemed election for all debt instruments with market discount acquired by the holder on or after the first day of the first taxable year to which such election applies.
Market Discount. In general, a debt instrument is considered to have been acquired with “market discount” if it is acquired other than on original issue and if its holder’s adjusted tax basis in the debt instrument is less than (a) the sum of all remaining payments to be made on the debt instrument, excluding “qualified stated interest” or (b) in the case of a debt instrument issued with original issue discount, its adjusted issue price, by at least a de minimis amount. Any gain recognized by a U.S. Holder on the taxable disposition of a Claim that had been acquired with market discount should be treated as ordinary income to the extent of the market discount that accrued thereon while the Claim was considered to be held by the U.S. Holder (unless the U.S. Holder elected to include market discount in income as it accrued). To the extent that the Allowed Second Lien Notes Claims that were acquired with market discount are exchanged in a transaction that qualifies as a Tax-Free Exchange, the U.S. Holder may be required to recognize any market discount that accrued on the Allowed Second Lien Notes Claims (i.e., up to the time of the exchange) to the extent of any deemed gain. However, the tax law is unclear on this point. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE APPLICATION OF THE MARKET DISCOUNT RULES TO THEIR CLAIMS.
Market Discount. The following disclosure does not apply to qualified pension plans and other tax-exempt investors. The 3.50% Senior Notes have been issued with “market discount,” for United States federal income tax purposes, in an amount equal to the excess of the principal amount of the 3.50% Senior Notes over the purchase price paid for the 3.50% Senior Notes. Under the market discount rules, any gain recognized upon a sale or retirement of the 3.50% Senior Notes will be treated as ordinary income to the extent that such market discount has accrued during the period that the United States holder has held his 3.50% Senior Notes, and a deduction in respect of the interest expense incurred by the United States holder to carry the 3.50% Senior Notes may be required to be deferred until the taxable year of such disposition. In the alternative, the United States holder may elect to include market discount in income on a current basis, in which case the interest expense deferral rule described immediately above would not apply, and such election would apply to all market discount obligations subsequently acquired by the United States holder. Note: A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time. The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting XXXXX on the SEC Web site at xxx.xxx.xxx. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated toll free at 1-800-294-1322; RBS Securities Inc. toll free at 0-000-000-0000; UBS Securities LLC toll free at 0-000-000-0000, ext. 561 3884; or Xxxxx Fargo Securities, LLC toll free at 0-000-000-0000. SCHEDULE IV-B Filed Pursuant to Rule 433 Registration No. 333-149361 November 15, 2010 PRICING TERM SHEET 5.40% Senior Notes due January 15, 2040 Issuer: Pacific Gas and Electric Company Size: $250,000,000 The 5.40% Senior Notes due January 15, 2040 will be part of the same series of notes as the $550,000,000 principal amount of 5.40% Senior Notes due January 15, 2020, offered an...
Market Discount. The amount of market discount on Foreign Currency Notes includible in income will generally be determined by translating the market discount determined in the foreign currency into U.S. dollars at the spot rate on the date the Foreign Currency Note is retired or otherwise disposed of. If the U.S. Holder has elected to accrue market discount currently, then the amount which accrues is determined in the foreign currency and then translated into U.S. dollars on the basis of the average exchange rate in effect during such accrual period. A U.S. Holder will recognize exchange gain or loss with respect to market discount which is accrued currently using the approach applicable to the accrual of interest income as described above. Amortizable Bond Premium Bond premium on a Foreign Currency Note will be computed in the applicable foreign currency. With respect to a U.S. Holder that elects to amortize the premium, the amortizable bond premium will reduce interest income in the applicable foreign currency. At the time bond premium is amortized, exchange gain or loss (which is generally ordinary income or loss) will be realized based on the difference between spot rates at such time and at the time of acquisition of the Foreign Currency Note. A U.S. Holder that does not elect to amortize bond premium will translate the bond premium, computed in the applicable foreign currency, into U.S. dollars at the spot rate on the maturity date and such bond premium will constitute a capital loss which may be offset or eliminated by exchange gain.
