Conduit Borrower [Internal Revenue] Law and Legal Definition
Pursuant to 26 CFR 1.150-1 [Title 26 Internal Revenue; Chapter I Internal Revenue Service, Department of the Treasury; Subchapter A Income Tax; Part 1 Income Taxes; Normal Taxes and Surtaxes; Computation of Taxable Income; Tax Exemption Requirements for State and Local Bonds], the term Conduit Borrower means “the obligor on a purpose investment (as defined in § 1.148-1). For example, if an issuer invests proceeds in a purpose investment in the form of a loan, lease, installment sale obligation, or similar obligation to another entity and the obligor uses the proceeds to carry out the governmental purpose of the issue, the obligor is a conduit borrower.”
Legal Definition list
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