Internal Revenue Bulletin: 2007-7
February 12, 2007
Table of Contents
Investor control and general public; taxation of variable contracts; insurance and annuities. This ruling effectively excludes classes of beneficial ownership from the definition of “general public” as defined in Rev. Rul. 81-225, 1981-2 C.B. 12, for purposes of investor control analysis. Investor control analysis is used to determine who owns (and is taxed on) income generated inside of variable contracts (e.g., variable life insurance contracts or variable annuity contracts). Rev. Ruls. 81-225 and 2003-92 clarified and amplified.
Section 357(c). Section 357(c)(1) of the Code does not apply to transactions that qualify as reorganizations described in sections 368(a)(1)(A), (C), (D), or (G), and to which section 351 applies, provided certain requirements are satisfied. Rev. Ruls. 75-161 and 76-188 obsoleted. Rev. Rul. 78-330 modified.
Final regulations under section 863 of the Code contain rules governing the source of income from certain space and ocean activities. They also contain rules governing the source of income from certain communications activities. The regulations affect persons who derive income from activities conducted in space or on or under water not within the jurisdiction of a foreign country, possession of the United States, or the United States (in international water). The regulations also affect persons who derive income from transmission of communications.
Final regulations under sections 446(e) and 1016(a)(2) of the Code provide rules for determining which changes in depreciation or amortization are, and are not, changes in method of accounting.
Final regulations under section 6664 of the Code provide circumstances that end the period within which a taxpayer may file an amended return that constitutes a qualified amended return. Qualified amended returns are used to determine whether an underpayment exists that is potentially subject to the accuracy-related penalty on underpayments.
This procedure provides exceptions to the contractual protection filter, which is a reportable transaction under regulations section 1.6011-4(b)(4). Rev. Proc. 2004-65 modified and superseded.
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