Internal Revenue Bulletin: 2004-28
July 12, 2004
Table of Contents
Final regulations under section 168 of the Code provide guidance on how to depreciate property for which the use changes in the hands of the same taxpayer. These regulations explain when a change in use occurs and how a taxpayer should determine depreciation in the year of the change in use, and in subsequent years.
Final and temporary regulations under section 280F of the Code exclude vans and trucks that are qualified nonpersonal use vehicles (as defined in section 1.274-5T(k)) from the definition of “passenger automobile” for purposes of section 280F(a), including transition rules for property placed in service prior to July 7, 2003.
Proposed regulations under section 1374 of the Code provide for an adjustment to the amount that may be subject to tax in certain cases in which an S corporation acquires assets from a C corporation in an acquisition to which section 1374(d)(8) applies. These regulations provide guidance to certain S corporations that acquire assets from a C corporation in a carryover basis transaction.
Proposed regulations under section 864 of the Code relate to the application of the asset-use test to stock held by foreign insurance companies. The regulations provide that the exception to the asset-use test for stock does not apply in determining whether the income, gain, or loss from portfolio stock held by foreign insurance companies constitutes income effectively connected with the conduct of a trade or business within the United States.
Charitable contributions and conservation easements. This notice informs taxpayers that the Service will, in appropriate cases, reduce or disallow deductions claimed by taxpayers under section 170 of the Code for transfers in connection with conservation easements. This notice also informs participants in these transactions that they may be subject to other adverse tax consequences, including penalties, excise taxes, and loss of tax-exempt status, as appropriate.
Section 368(a)(1)(B). The Service is requesting public comments regarding Rev. Proc. 81-70, 1981-2 C.B. 729, which contains the guidelines for estimating the basis of stock acquired in a B reorganization.
This notice advises taxpayers that the Service will challenge the meritless filing position of certain U.S. citizens who claim to be residents of the U.S. Virgin Islands and to have income from sources in the U.S. Virgin Islands or income effectively connected to the conduct of a trade or business in the U.S. Virgin Islands.
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