Treatment if Prepetition 2025 Notes Claims Are Not Treated as Securities Sample Clauses

Treatment if Prepetition 2025 Notes Claims Are Not Treated as Securities. To the extent that a U.S. Holder’s Prepetition 2025 Notes Claims or the New 2027 Notes are not treated as a security, such U.S. Holder would be treated as exchanging its Prepetition 2025 Notes Claim for the New 2027 Notes in a fully taxable exchange under section 1001 of the Tax Code. A U.S. Holder of a Prepetition 2025 Notes Claim who is subject to this treatment should recognize gain or loss equal to the difference between (i) the sum of the amount of cash and the issue price of the New 2027 Notes (calculated as described under “—Issue Price”) in exchange for its Prepetition 2025 Notes Claims and (ii) the U.S. Holder’s adjusted tax basis in its Prepetition 2025 Notes Claims. The character of such gain or loss as capital gain or loss or as ordinary income or loss will be determined by a number of factors, including the tax status of the U.S. Holder, the nature of the Claim in such U.S. Holder’s hands, whether the Claim was purchased at a discount, and whether and to what extent the U.S. Holder previously has claimed a bad debt deduction with respect to its Claim. If recognized gain is capital gain, it generally would be long-term capital gain if the U.S. Holder held its Prepetition 2025 Notes Claims for more than one year at the time of the exchange. The deductibility of capital losses is subject to certain limitations, as discussed below. To the extent that a portion of the consideration received in exchange for its Prepetition 2025 Notes Claims is allocable to accrued but untaxed interest, the U.S. Holder may recognize ordinary income. A U.S. Xxxxxx’s tax basis in the New 2027 Notes should be equal to the issue price of the New 2027 Notes. A U.S. Xxxxxx’s holding period for the New 2027 Notes received on the Effective Date should begin on the day following the Effective Date.