Internal Revenue Bulletin:  2005-32 

August 8, 2005 

TAX CONVENTIONS


Table of Contents

Notice 2005-53 Notice 2005-53

This notice provides supplemental guidance for foreign banks concerning interest expense allocation. The notice also indicates that the Treasury Department and the IRS are evaluating foreign banking industry data to determine whether the 93-percent fixed ratio in step 2 of the interest expense allocation formula under regulations section 1.882-5 should be increased, and whether the fair market value election for valuing U.S. assets should require the use of the actual ratio in step 2. The notice also permits taxpayers who use the adjusted U.S. book liability method to calculate excess interest by reference to a published LIBOR rate rather than the taxpayer’s actual non-U.S.-based dollar borrowing rate.


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