### Question
How is the term acquisition discount defined?


### Answer
The term **acquisition discount** is defined in *26 U.S.C. § 1283* as the following:

> the excess of—


(A) the stated redemption price at maturity (as defined in section 1273), over


(B) the taxpayer's basis for the obligation

#### Citation:
  - *26 U.S.C. § 1283*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter P-Capital Gains and Losses > PART V-SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS > Subpart C-Discount on Short-Term Obligations**

