Internal Revenue Bulletin: 2006-41
October 10, 2006
Table of Contents
Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for October 2006.
Low-income housing credit; satisfactory bond; “bond factor” amounts for the period January through December 2006. This ruling provides the monthly bond factor amounts to be used by taxpayers who dispose of qualified low-income buildings or interests therein during the period January through December 2006.
Final regulations under sections 168(k) and 1400L(b) of the Code provide guidance regarding the additional first year depreciation deduction for qualified property and 50-percent bonus depreciation property under section 168(k) and for qualified New York Liberty Zone property under section 1400L(b).
Final regulations under section 448 of the Code provide rules relating to the use of a nonaccrual-experience method of accounting by taxpayers using an accrual method of accounting and performing services. The regulations affect qualifying taxpayers that want to adopt, change to, or change a nonaccrual-experience method of accounting under section 448(d)(5).
Proposed regulations clarify the circumstances in which accounts or notes receivable are “acquired ... for services rendered” within the meaning of section 1221(a)(4) of the Code. A public hearing is scheduled for November 7, 2006. Simultaneously with the publication of these proposed regulations in the Federal Register, the following revenue rulings are being declared obsolete: Rev. Ruls. 72-238 and 73-558.
This notice announces the phase-out of the qualified hybrid motor vehicle credit and the new advanced lean burn technology motor vehicle credit for passenger automobiles and light trucks manufactured by Toyota Motor Corporation that are purchased for use or lease in the United States beginning on October 1, 2006.
This notice concludes that income from performing services at the U.S. Naval Base at Guantanamo Bay is not income earned in a restricted country (Cuba) for purposes of the limitation set forth in section 911(d)(8)(A) of the Code and thus, an individual working at Guantanamo Bay is eligible for the section 911 foreign earned income exclusion, provided that the other requirements of that section are met.
This notice announces that the IRS and Treasury intend to issue regulations under section 367(b) to address certain triangular reorganizations involving foreign corporations. The regulations will apply to triangular reorganizations where either the parent corporation or its subsidiary are foreign and where the subsidiary acquires from the parent, in exchange for property, parent stock that is used to acquire the stock or assets of a target corporation. The regulations will treat the transfer of property from the subsidiary to its parent as a distribution of property under section 301(c) and make corresponding adjustments.
This notice provides interim guidance under section 152(c)(4) of the Code, the rule for determining which taxpayer may claim a qualifying child when two or more taxpayers claim the same child. It clarifies that, unless the special rule in section 152(e) applies, the tie-breaking rule in section 152(c)(4) applies to the head of household filing status, the child and dependent care credit, the child tax credit, the earned income credit, the exclusion for dependent care assistance, and the dependency deduction as a group, rather than on a section-by-section basis.
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