Internal Revenue Bulletin: 2005-39
September 26, 2005
Table of Contents
LIFO; price indexes; department stores. The July 2005 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, July 31, 2005.
Interaction of sections 469 and 4261. This ruling describes the circumstances in which losses incurred by an individual who provides air transportation through a passthrough entity can qualify as passive losses under section 469 of the Code. In addition, this ruling describes the applicability of section 4261 to the amounts paid for the air transportation services.
Proposed regulations under section 162(k) of the Code provide guidance concerning which corporation is entitled to the deduction for applicable dividends under section 404(k) and also clarify that a payment in redemption of employer securities held by an ESOP is not deductible.
This notice clarifies that employers that amend their cafeteria plans to provide a grace period for dependent care assistance may continue to rely on the safe harbor in Notice 89-111, 1989-2 C.B. 449, and report salary reduction amounts elected by an employee for a calendar year on Form W-2. Notice 89-111 amplified.
The Department of Homeland Security issued a temporary waiver of the Jones Act as a result of Hurricane Katrina. The waiver permits foreign corporations to operate ships in the U.S. domestic trade to transport petroleum and refined petroleum products between U.S. ports for a limited period. The notice provides that the IRS will not challenge certain positions taken by foreign corporations operating ships pursuant to the waiver and by ships’ nonresident alien crewmembers.
This announcement advises donee organizations of the release of new Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes. The form is used by donee organizations to file with the IRS to satisfy the reporting requirements of new section 170(f)(12) of the Code. The form may also be used to furnish the donor of a qualified vehicle with a contemporaneous written acknowledgment.
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