Section 637 | Accrued income losses treated as payments in next interest period

(1)This section applies if—

(a)a person is treated as making accrued income losses in an interest period as a result of transfers of securities, and

(b)the period does not end with an interest payment day.

(2)For the purposes of this Chapter the person is treated as making a payment on a transfer of the securities in the next interest period equal to the amount of the losses.

(3)For cases where the period does end with an interest payment day, see sections 678 to 680 (exemptions for interest on securities involving accrued income losses).