Internal Revenue Bulletin: 2007-8
February 20, 2007
Final regulations under section 671 of the Code amend regulations section 1.671-5, which provides reporting requirements for widely held fixed investment trusts (WHFITs) to clarify and simplify the application of those rules to both non-mortgage widely held fixed investment trusts and widely held mortgage trusts.
Proposed regulations under sections 358, 362, and 1502 of the Code apply when a corporation, which is a member of a consolidated group, transfers a loss share of subsidiary stock. First, basis is redetermined by reallocating investment adjustments to adjust for disproportionate reflection of gains and losses in the bases of members’ shares. Second, members’ bases in transferred loss shares are reduced (but not below value) by the net positive amount of all investment adjustments applied to the bases of those shares. Finally, the attributes of the subsidiary are reduced to the extent there is a duplicated loss on transferred shares.
This notice provides for the waiver of additions to tax under section 6654(a) of the Code for underpayment of estimated taxes by certain citizens or residents of the United States living abroad. The notice explains the changes in the law as enacted by the passage of the Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA) in May 2006 and who is eligible for the penalty waiver and to what extent.
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