Internal Revenue Bulletin:  2004-51 

December 20, 2004 

INCOME TAX


Rev. Rul. 2004-111 Rev. Rul. 2004-111

Interest rates; underpayments and overpayments. The rate of interest determined under section 6621 of the Code for the calendar quarter beginning January 1, 2005, will be 5 percent for overpayments (4 percent in the case of a corporation), 5 percent for underpayments, and 7 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 2.5 percent.

REG-145535-02 REG-145535-02

Proposed regulations define the terms predecessor and successor for purposes of section 355(e) of the Code. These regulations provide guidance in determining whether a corporation is a predecessor or successor of a distributing or controlled corporation, as well as rules to assist taxpayers in determining whether an acquisition of an interest in a corporation would cause a distributing corporation to recognize gain under section 355(e). The regulations affect corporations that distribute the stock of controlled corporations in distributions described in section 355.

REG-149519-03 REG-149519-03

Proposed regulations under section 707 of the Code provide guidance relating to the treatment of transactions between a partnership and its partners as disguised sales of partnership interests between partners. The regulations describe circumstances in which a transfer of consideration (including the assumption of a liability) by a purchasing partner to a partnership and a transfer of consideration by the partnership to a selling partner constitute a sale of a partnership interest. In addition, the proposed rules require disclosure of certain transfers and assumptions of liabilities to the Service. A public hearing is scheduled for March 8, 2005.


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