A modification means any alteration, including any deletion or addition, in whole or in part, of a legal right or obligation of the issuer or a holder of a debt instrument, whether the alteration is evidenced by an express agreement (oral or written), conduct of the parties, or otherwise. Paragraph (g) of this section contains examples illustrating the application of the rules in paragraphs (e) and (f) of this section. Paragraph (f) of this section also provides rules for determining whether the modified instrument received in an exchange will be classified as an instrument or property right that is not debt for federal income tax purposes. Paragraphs (e) and (f) of this section provide rules for determining when a modification is a significant modification. Paragraphs (c) and (d) of this section define the term modification and contain examples illustrating the application of the rule. A modification that is not a significant modification is not an exchange for purposes of В§ 1.1001-1(a). For purposes of В§ 1.1001-1(a), a significant modification of a debt instrument, within the meaning of this section, results in an exchange of the original debt instrument for a modified instrument that differs materially either in kind or in extent. This section does not apply for purposes of determining whether tax-exempt bonds that are qualified tender bonds are reissued for purposes of sections 103 and 141 through 150. This section, however, does not apply to exchanges of debt instruments between holders. This section also applies to a modification of a debt instrument that the issuer and holder accomplish indirectly through one or more transactions with third parties. For example, this section applies to an exchange of a new instrument for an existing debt instrument, or to an amendment of an existing debt instrument. This section applies to any modification of a debt instrument, regardless of the form of the modification. This section provides rules for determining whether a modification of the terms of a debt instrument results in an exchange for purposes of В§ 1.1001-1(a). В§ 1.1001-3 Modifications of debt instruments.

Irc 1001