Section 730A and ITA07/S607-S611 also apply to special collateral repos CFM17180. In this case it is possible that the interim holder (in substance, the cash “lender”) may sell the securities back for less than the purchase price (so that the “lender” is in effect paying the “borrower” for the privilege of “lending”). Section 730A or, as the case may be, ITA07/S607 nonetheless treats this as interest paid by the interim holder on a deemed loan from the original owner.
