Internal Revenue Bulletin: 2006-9
February 27, 2006
LIFO; price indexes; department stores. The December 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, December 31, 2005.
Section 45 credit offset. The credit under section 45 of the Code for electricity produced from qualified energy resources at a qualified facility is not reduced under section 45(b)(3) on account of a state or local tax credit.
Some business entities may be recognized under state or foreign law as created or organized in more than one jurisdiction at the same time (“dually chartered entities”). Final regulations under section 7701 of the Code provide clarification regarding how to determine the federal tax classification (e.g., corporation, partnership, or an entity disregarded as separate from its owner) of a dually chartered entity and how to determine whether a dually chartered entity is domestic or foreign.
Final and temporary regulations under section 861 of the Code provide an alternative method of valuing assets for purposes of apportioning expenses under the tax book value method of regulations section 1.861-9T.
Final and temporary regulations under section 937 of the Code provide rules for determining whether an individual is a bona fide resident of American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, or the U.S. Virgin Islands. The regulations also provide rules for determining residency for purposes of section 881(b). Related regulations concerning the source and effectively connected income rules, together with other conforming changes, particularly under sections 931 through 935, will be finalized in a forthcoming Treasury decision.
This notice provides examples of transactions that are not the same or substantially similar to those in Notice 2002-35 (i.e., are not “listed transactions”), such that the filing of Form 8886, Reportable Transaction Disclosure Statement, is not required. Further, for taxpayers who would be required to file a Form 8886 for transactions that are the same or substantially similar as those described in Notice 2002-35 solely as a result of the taxpayers’ interest in a pass-through entity, this notice creates a disclosure requirement safe harbor. Notice 2002-35 clarified and modified.
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