§ 301.7701(i)-3(a) Effective dates. Except as otherwise provided, the regulations under section 7701(i) are effective and applicable September 6, 1995.
§ 301.7701(i)-3(b) Entities in existence on December 31, 1991
§ 301.7701(i)-3(b)(1) In general. For transitional rules concerning the application of section 7701(i) to entities in existence on December 31, 1991, see section 675(c) of the Tax Reform Act of 1986.
§ 301.7701(i)-3(b)(2) Special rule for certain transfers. A transfer made to an entity on or after September 6, 1995, is a substantial transfer for purposes of section 675(c)(2) of the Tax Reform Act of 1986 only if—
§ 301.7701(i)-3(b)(2)(i) The transfer is significant in amount; and
§ 301.7701(i)-3(b)(2)(ii) The transfer is connected to the entity's issuance of related debt obligations (as defined in paragraph (b)(3) of this section) that have different maturities (within the meaning of § 301.7701-1(e)).
§ 301.7701(i)-3(b)(3) Related debt obligation. A related debt obligation is a debt obligation whose payments bear a relationship (within the meaning of § 301.7701-1(f)) to payments on debt obligations that the entity holds as assets.
§ 301.7701(i)-3(b)(4) Example. The following example illustrates the principles of this paragraph (b):
On December 31, 1991, Partnership Q holds a pool of real estate mortgages that it acquired through retail sales of single family homes. Partnership Q raises $10,000,000 on October 25, 1996, by using this pool to issue related debt obligations with multiple maturities. The transfer of the $10,000,000 to Partnership Q is a substantial transfer (within the meaning of § 301.7701(i)-3(b)(2)).
§ 301.7701(i)-3(c) Duration of taxable mortgage pool classification
§ 301.7701(i)-3(c)(1) Commencement and duration. An entity is classified as a taxable mortgage pool on the first testing day that it meets the definition of a taxable mortgage pool. Once an entity is classified as a taxable mortgage pool, that classification continues through the day the entity retires its last related debt obligation.
§ 301.7701(i)-3(c)(2) Testing day defined. A testing day is any day on or after September 6, 1995, on which an entity issues a related debt obligation (as defined in paragraph (b)(3) of this section) that is significant in amount.