§ 8146 — Obligation to pay money

(a) Interest allocated to income.--An amount received as interest, whether determined at a fixed, variable or floating rate, on an obligation to pay money to the trustee, including an amount received as consideration for prepaying principal, shall be allocated to income without any provision for amortization of premium.

(b) Allocation of obligations.--A trustee shall allocate to principal an amount received from the sale, redemption or other disposition of an obligation to pay money to the trustee more than one year after it is purchased or acquired by the trustee, including an obligation the purchase price or value of which when it is acquired is less than its value at maturity. If the obligation matures within one year after it is purchased or acquired by the trustee, an amount received in excess of its purchase price or its value when acquired by the trust shall be allocated to income.

(c) Application.--This section does not apply to an obligation to which any of the following apply:

(1) Section 8149 (relating to retirement benefits, individual retirement accounts, deferred compensation, annuities and similar payments).

(2) Section 8150 (relating to liquidating asset).

(3) Section 8151 (relating to minerals, water and other natural resources).

(4) Section 8152 (relating to timber).

(5) Section 8154 (relating to derivatives and options).

(6) Section 8155 (relating to asset-backed securities).