Market Discount Bond Law and Legal Definition
According to 26 USCS § 1355 [Title 26. Internal Revenue Code; Subtitle A. Income Taxes; Chapter 1. Normal Taxes and Surtaxes; Subchapter R. Election to Determine Corporate Tax on Certain International Shipping Activities Using Per Ton Rate], the term ‘market discount bond’ means “any bond having market discount. The term "market discount bond" shall not include--
(i) Short-term obligations. Any obligation with a fixed maturity date not exceeding 1 year from the date of issue.
(ii) United States savings bonds. Any United States savings bond.
(iii) Installment obligations.”