Rev. Rul. 61-222

The provisions of section 265(2) of the Internal Revenue Code of 1954 have no application to interest paid on indebtedness represented by deposits in banks engaged in the general banking business since such indebtedness is not considered to be `indebtedness incurred or continued to purchase or carry obligations * * *' within the meaning of section 265. Section 265(2) of the Code provides for the nondeductibility of interest on indebtedness incurred to purchase or carry certain obligations on which the interest is exempt from Federal income tax.

¹ Based on Technical Information Release 348, dated December 1, 1961.