Ark. Code R. 26-51-404 - 6(a)(1) (1997) - Notes of Indebtedness Used in Payment

Notes or other evidence of indebtedness, received as payment for goods or services or other types of income and not merely as security for such payment, constitute income to the amount of their fair market value. Such notes not bearing interest shall be discounted at the fair market rate and the discounted value recognized as income at the time of receipt. The amount of the discount of such notes is amortized and recognized as income when received by the taxpayer.