Internal Revenue Bulletin: 2005-24
June 13, 2005
Table of Contents
Interest rates; underpayments and overpayments. The rate of interest determined under section 6621 of the Code for the calendar quarter beginning July 1, 2005, will be 6 percent for overpayments (5 percent in the case of a corporation), 6 percent for underpayments, and 8 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 3.5 percent.
Final regulations under section 1031 of the Code replace the Standard Industrial Classification (SIC) system of codes with the North American Industry Classification System (NAICS) for purposes of determining what depreciable tangible personal property is like-kind to other property.
Proposed regulations under section 475 of the Code set forth an elective safe harbor for dealers in securities and/or commodities and traders in securities and commodities that permits these taxpayers to make an election pursuant to which the values of the positions reported on certain financial statements are the fair market values of those positions. The safe harbor is based upon the principle that if the mark-to-market method used for financial reporting is sufficiently consistent with the mark-to-market method required by section 475, then the values used for financial reporting should be acceptable values for purposes of section 475, even if those values are not fair market values under general tax principles. To ensure minimal divergence from fair market values under tax principles, the regulations impose certain restrictions on the financial accounting methods and statements that are eligible for the safe harbor and may require certain adjustments to values used in the safe harbor. This safe harbor attempts to reduce the compliance burden upon taxpayers and to improve the administrability of valuations for the IRS. A public hearing is scheduled for September 15, 2005.
Proposed regulations under section 83 of the Code withdraw the remaining portion of the notice of proposed rulemaking published in the Federal Register on June 3, 1971 (36 FR 10787) and contain proposed regulations relating to the tax treatment of certain transfers of partnership equity in connection with the performance of services. The regulations provide that the transfer of a partnership interest in connection with the performance of services is subject to section 83 and provide rules for coordinating section 83 with partnership taxation principles. The regulations also provide that no gain or loss is recognized by a partnership on the transfer or vesting of an interest in the transferring partnership in connection with the performance of services for the transferring partnership. A public hearing is scheduled for October 5, 2005.
Proposed regulations under sections 367(a) and (b) of the Code relate to certain transfers of stock involving foreign corporations pursuant to section 304(a)(1).
This notice includes a proposed revenue procedure providing additional rules for the elective safe harbor under the proposed regulations under section 83 of the Code governing the application of section 83 to the transfer of a partnership interest in connection with the performance of services.
Deductions for entertainment use of aircraft. This notice provides interim guidance to taxpayers on the limitation under section 274(e) of the Code on the deductible amount of trade or business expenses incurred after October 22, 2004, for use of a business aircraft for entertainment.
|More Internal Revenue Bulletins|