11 April 1990 T.I. AC58705 File 5-8705

premiums received for the issue of bonds (presumably on income account) were to be included in income at the time of issue under s. 9 rather than s. 12(1)(a) "as the premiums represent consideration for the issuance of the obligations and are received regardless of the period of time that the debt is outstanding." Therefore, under the Robertson test, the taxpayer's right to the premiums is "absolute and under no restriction," so that the amortization treatment available under GAAP was not applicable for income tax purposes. However, even if the bond premiums were instead included in income under s. 12(1)(a), a reserve under s. 20(1)(m) would not be available, so that the full amount again would be income in the year of issue.

premiums received for the issue of bonds (presumably on income account) were to be included in income at the time of issue under s. 9 rather than s. 12(1)(a) "as the premiums represent consideration for the issuance of the obligations and are received regardless of the period of time that the debt is outstanding." Therefore, under the Robertson test, the taxpayer's right to the premiums is "absolute and under no restriction," so that the amortization treatment available under GAAP was not applicable for income tax purposes. However, even if the bond premiums were instead included in income under s. 12(1)(a), a reserve under s. 20(1)(m) would not be available, so that the full amount again would be income in the year of issue.