6097 (EXHIBIT A - E) (2) - Laserfiche WebLink

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requirements may cause the inclusion of the Interest Component in gross income for federal and Missouri income tax purposes retroactive to the date of original execution and delivery of the Certificates. The Certificates are "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, and, in the case of certain financial institutions (within the meaning of Section 265(b)(5) of the Code), a deduction is allowed for 80 percent of that portion of such financial institution's interest expense allocable to the Interest Component. Special Tax Counsel expresses no opinion as to the treatment for federal income tax purposes of any monies received by an owner of the Certificates other than payments made by the City pursuant to the Lease, upon an Event of Nonappropriation or an Event of Default. There is no assurance that such monies received by the owners of the Certificates in such events will be excluded from gross income for federal income tax purposes. Special Tax Counsel expresses no opinion regarding other federal tax consequences arising with respect to the Certificates. Other Tax Consequences Prospective purchasers of the Certificates should be aware that there may be tax consequences of purchasing the Certificates other than those discussed under the caption "Opinion of Special Tax Counsel," including the following: (1) Section 265 of the Code denies a deduction for interest on indebtedness incurred or continued to purchase or carry the Certificates, except with respect to certain financial institutions (within the meaning of Section 265(b)(5) of the Code); (2) with respect to insurance companies subject to the tax imposed by Section 831 of the Code, Section 832(b)(5)(B)(i) reduces the deduction for loss reserves by 15 percent of the sum of certain items, including the Interest Component; (3) for taxable years beginning before January 1, 1996, the Interest Component earned by some corporations could be subject to the environmental tax imposed by Section 59A of the Code; (4) the Interest Component earned by certain foreign corporations doing business in the United States could be subject to a branch profits tax imposed by Section 884 of the Code; (5) passive investment income, including the Interest Component, may be subject to federal income taxation under Section 1375 of the Code for Subchapter S corporations that have Subchapter C earnings and profits at the close of the taxable year, if greater than 25% of the gross receipts of such Subchapter S corporation is passive investment income; and (6) Section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take into account, in determining gross income, receipts or accruals of the Interest Component. Special Tax Counsel expresses no opinion regarding these tax consequences. Purchasers of Certificates should consult their own tax advisors as to the applicability of these consequences. ABSENCE OF LITIGATION There is not now pending or, to the City's knowledge, threatened, any litigation seeking to restrain or enjoin or in any way limit the approval or the issuance and delivery of this Official Statement or the -33-