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1991-03-08 Resolution 36
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1991-03-08 Resolution 36
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7/17/2008 3:37:33 PM
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Under the Code, ownership of tax-exempt obligations may ulna result in colMikhout <br />• federal income tax consequences to certain taxpaycrs including, <br />limitation, S .corporations, financial .institutions, property and casualty <br />insutance companies, indivl0u81 recipients of Social Security yr Railroad <br />Retirement banefitr and taxpayers who may be deetaed to hacionscurred (or <br />' continued) indebtadnars to purchase or carry tax-exempt oblig <br />No provision has been made for redemption of tie Bonds, or for an increase in the <br />interest rate on the Bondb, in th4 avant that interact on the Bonds becomes <br />subject to income taxation. <br />The foregoing dues nvt purport to be a compreheneivc diBCUeaion of the tax <br />Consequences of owning the Bonds. Proapcrti•ae owners of the Bonds should conaulr <br />their own L8x advisors with respect to the foregoing and other tax conscquoncen <br />of o~+ning the Bonds. <br />ORIGINAL 'SctT~ DISCOUNT <br />~'or Federal income tsx purpocpc, the LQaue l2antttl aondz maturing on August 1, <br />2007 through and .including August 1, 2012 (the. "Discount Rands°) will be <br />considered to have "original issue discount' aquai to thn diffsr6nca between <br />their respective original issue price end tY~e arnaun~ payable upon their <br />respective maturities. Th= original issue pYicc of each Discount Sond will ba <br />the initial offering price to the public at whic?~ a substantial ansount of such <br />Discount $opds are sold, and the issue date will be the date on which such <br />Discount Bonds arE first issued to the public. Under exisCing law, the original <br />issue discount on a Discount Bone accrued In the hands of a holder is treated fvr <br />Federal income tax purposes as interest which is excludable pursuant to Section; <br />• 103 of the Coda fYv~n groan incona, arsuming compliance by the Issuer with its .Tax <br />Covenants. Tha holder's basic for determining gain ar lots an a sale, maturity <br />or other diepotition of a Discount Bond generally ,dill equal the hcldQr's: cost, <br />incrtased by thm original issue discount that is accrued during the period that <br />the Discvurrt Bond is held by such holder. Gt»ernlly, any gain or lose rocognizac <br />by a holder on a sale, exchange or payment at maturity of a Discount Bond (beaed <br />on the holder's basis) will be taxable as capital gain or leas (assuming the <br />Discount Bond is held as a capital asset). A holder will recognize a taxable <br />gain or loss on a Discount Bond called prior to maturity en the difference <br />batwaon rho herder's basis and the call price of the Discount Bond, Owners of <br />the Discount Bonds should consult their own tax advisers with respect to the <br />vomputation for Fadaral income tax purposes of the amounts of original issue <br />discount which accrue during the period in which such Discount-Bonds are held. <br />Occners v£ tht Discount Bonds should also eon$ult shalt own tax advitorc with <br />respect to the state and local tax consequences arising from the original issue <br />dlscount of she Discount Honda. <br /> <br />
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