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May 2005 Plain Language Regulations

Limitations on Benefits and Contributions under Qualified Plans
The proposed regulations contain proposed amendments to the regulations under section 415 of the Internal Revenue Code regarding limitation on benefits and contributions under qualified plans. The proposed amendments provide comprehensive guidance regarding the limitations of section 415, including updates to the regulations for numerous statutory changes since regulations were last published. The proposed regulations also make conforming changes to regulations under sections 401(a)(9), 401(k), 403(b), and 457, and make other minor corrective changes to regulations under section 457.
REG-130241-04.  Published May 31, 2005.
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Assumption of Partner Liabilities
These regulations relate to the definition of liabilities under section 752 of the Internal Revenue Code. These regulations provide rules regarding a partnership's assumption of certain fixed and contingent obligations in connection with the issuance of partnership interest.  In addition, these regulations provide certain conforming changes to other regulations.  These regulations also provide rules under section 358(h) for assumptions of liabilities by corporations from partners and partnerships.  Finally, this document also contains temporary regulations relating to the assumption of certain liabilities under section 358(h), which are cross-referenced to a notice of proposed rulemaking.  TD 9207.  Published May 26, 2005.
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Assumption of Liabilities
Subject to two exceptions that may be limited by the Secretary, section 358(h) prevents the acceleration or duplication of losses by limiting the basis of stock received in certain non-recognition transactions, involving the assumption of certain liabilities, to the fair market value of such stock.  This NPRM contains proposed regulations that remove the exception wherein assets with which the assumed liability is associated are transferred in the exchange.
REG-106736-00.  Published May 26, 2005.
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Credit for Increasing Research Activities
These proposed regulations provide rules for the computation and allocation of the credit for increasing research activities in the case of a controlled group of corporations or a group of trades or business under common control.  These proposed regulations provide rules for making and revoking an election to compute the research credit using the alternate incremental research credit rules.  These proposed regulations also withdraw proposed regulations published on July 29, 2003 (68 FR 44499).  REG-134030-04 and REG-133791-02.  Published May 24, 2005.
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Application of Section 367 in Cross Border Section 304 Transactions;
Certain Transactions of Stock Involving Foreign Corporations:
If under section 304(a)(1), a transfer of stock in a domestic or foreign corporation by a U.S. person to a foreign corporation is treated as a transaction to which section 351 applies, such transfer is not subject to section 367(a).  Also, if under section 304(a)(1) a transfer of foreign corporation stock to a foreign corporation is treated as a transaction to which section 351 applies, such transfer is not subject to section 367(b).  REG-127740-04.  Published May 25, 2005.
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Credit for Increasing Research Activities
These temporary regulations provide rules for the computation and allocation of the credit for increasing research activities in the case of a controlled group of corporations or a group of trades or businesses under common control.  These temporary regulations also provide rules for making and revoking an election to compute the research credit using the alternative incremental research credit rules.
TD 9205.  Published May 24, 2005.
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Mortgage Revenue Bonds
Generally, interest on bonds issued by State and local governments is excluded from gross income.  However, this exclusion does not apply to non-qualified private activity bonds.  A qualified mortgage bond or a qualified veterans' mortgage bond (together, "qualified mortgage revenue bonds") may be a qualified bond.  A bond may only be a qualified mortgage revenue bond if the effective rate of mortgage interest on the mortgages provided with the bond proceeds does not exceed the yield on the bonds by more than 1.125 percentage points.  The final regulations provide rules for calculating the effective rate of mortgage interest.  Specifically, the regulation provides that amounts paid for pool mortgage insurance are to be excluded from the calculation of the effective rate of mortgage interest (which results in a lower effective rate of mortgage interest).
TD 9204.  Published May 23, 2005.
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Attained Age of the Insured under Section 7702
These proposed regulations provide guidance explaining how to determine the attained age of an insured for purposes of testing whether a contract qualifies as a life insurance contract for Federal income tax purposes.
REG-168892-03.  Published May 24, 2005.
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Deemed Election to be an Association Taxable as a Corporation for a Qualified Electing S Corporation
An entity with two or more members that is not required to be a corporation for federal tax purposes may elect to be classified as an association taxable as a corporation or as a partnership.  The final regulations address this issue by providing that whenever an entity timely elects to be treated as an S corporation the entity will be deemed to have elected to be classified as an association taxable as a corporation.
TD 9203.  Published May 23, 2005.
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Safe Harbor for Valuation Under Section 475
Dealers in securities are required to mark their securities to fair market value.  Traders in securities and commodities and dealers in commodities may elect to mark eligible positions to fair market value.  Although the term "fair market value" has a well established meaning, both taxpayers and the IRS sometimes encounter difficulties when determining the fair market value of certain securities or commodities, particularly if there are no sales of comparable items.  To improve administrability in this area, the IRS and the Treasury Department are considering a safe harbor approach that would allow fair values used in certain financial statements to be used for fair market value purposes under section 475.  This safe harbor is elective and has certain requirements that must be met for the safe harbor to be used, including recordkeeping and record production requirements. 
REG-100420-03.  Published May 24, 2005.
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Dual Consolidated Loss Regulations
Section 1503(d) generally provides that a dual consolidated loss of a dual resident corporation cannot reduce the taxable income of any other member of the affiliated group unless, to the extent provided in regulations, such loss does not offset the income of any foreign corporation.  Similar rules apply to losses of separate units of domestic corporations.  These proposed regulations address various dual consolidated loss issues, including exceptions to the general prohibition against using a dual consolidated loss to reduce the taxable income of any other member of the affiliated group.  REG-102144-04.  Published May 24, 2005.
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Partnership Equity for Services
The proposed regulations provide guidance relating to the federal income tax treatment of the transfer of equity interests in a partnership in connection with the performance of services.  These proposed regulations provide that the transfer of a partnership interest in connection with the performance of services is subject to section 83 of the Internal Revenue Code and provide rules for coordinating section 83 with partnership taxation principles.  The proposed regulations also provide that no gain or loss is recognized by a partnership on the transfer or vesting of a partnership interest in connection with the performance of services for the partnership.  Additionally, the proposed regulations modify the regulations under section 704(b) regarding revaluations, the maintenance of the partnerships' capital accounts, and provide for allocations upon the forfeiture of a partnership interest.  REG-105346-03.  Published May 24, 2005.
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Information Reporting Relating to Qualified Intellectual Property Contributions
These proposed regulations provide guidance for the filing of information returns by donees relating to qualified intellectual property contributions.  These regulations implement section 882 of the American Jobs Creation Act of 2004 (Public Law 108-357, 118 Stat. 1418) (the Act), which directs that regulations be issued regarding information returns by donees relating to qualified intellectual property contributions made after June 3, 2004.
REG-158138-04.  Published May 23, 2005.
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Information Reporting Relating to Qualified Intellectual Property Contributions
These temporary regulations provide guidance for the filing of information returns by donees relating to qualified intellectual property contributions.  These regulations implement section 882 of the American Jobs Creation Act of 2004 (Public Law 108-357, 118 Stat. 1418) (the Act), which directs that regulations be issued regarding information returns by donees relating to qualified intellectual property contributions made after June 3, 2004.
TD 9206.  Published May 23, 2005.
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Regulations Governing Practice Before the Internal Revenue Service
These regulations modify section 10.35 which prescribes specific requirements for covered opinions.  Certain written advice issued after a tax return is filed, advice provided by taxpayer's in-house counsel, and negative advice are excluded from the requirements of covered opinions.  These regulations also clarify principal purpose and prominently disclose.
TD 9201.  Published May 19, 2005.
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Additional Rules for Exchanges of Personal Property
Under some circumstances, taxpayers can exchange property for like-kind property without recognizing gain.  One way that depreciable tangible personal property is considered "like-kind" to other property is if it has the same code or numerical classification assigned to it by the Department of Commerce.  Because the Department of Commerce has replaced the Standard Industrial Classification (SIC) system of codes with North American Industry Classification System (NAICS), this regulation also replaces SIC codes with NAICS codes for purposes of determining what depreciable tangible personal property is like-kind to other property.
TD 9202.  Published May 19, 2005.
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Withholding on Effectively Connected Taxable Income Allocable to Foreign Partners
A partnership must pay a withholding tax on any portion of the partnership's income, that is effectively connected with its U.S. trade or business, which is allocable to foreign partners.  The final regulations being issued provide guidance on computing and paying that withholding tax.  The temporary regulations being issued provide rules permitting a partnership under certain circumstances to consider partner-level deductions and losses when computing this withholding tax obligation with respect to a foreign partner.  TD 9200.  Published May 18, 2005.
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Withholding on Effectively Connected Taxable Income Allocable to Foreign Partners
A partnership must pay a withholding tax on any portion of the partnership's income, that is effectively connected with its U.S. trade or business, which is allocable to foreign partners.  These proposed regulations cross-reference temporary regulations (TD 9200) providing rules permitting a partnership under certain circumstances to consider partner-level deductions and losses when computing this withholding tax obligation.  REG-108524-00.  Published May 18, 2005.
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Page Last Reviewed or Updated: 30-Dec-2013