Internal Revenue Bulletin: 2009-40
October 5, 2009
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 2009.
Final regulations under section 860G of the Code expand the list of permitted modifications to include certain modifications that are often made to commercial mortgages. Changes to the regulations are necessary to better accommodate evolving practices in the commercial-mortgage industry. These changes will affect lenders, borrowers, servicers, and sponsors of securitizations of mortgages in REMICs.
This notice announces rules that will be included in regulations identifying stock that is not taken into account for purposes of the ownership test of section 7874 of the Code. Stock generally will not be taken into account for this purpose if, subject to certain exceptions, it is issued in exchange for: (1) cash or cash equivalents; (2) marketable securities; and (3) any other property in a transaction with a principal purpose of avoiding section 7874. This notice also includes provisions regarding stock that is sold in a public offering.
This notice requests comments about whether additional guidance related to modifications of commercial loans held by investment trusts similar to the changes permitted under regulations section 1.860G-2(b)(3) of the Code is appropriate and the extent to which the requested changes are consistent with the Service position under section 301.7701-4(c) as related to fixed investment trusts. Additional comments must be submitted by November 14, 2009.
Extension of replacement period for livestock sold on account of drought. This notice explains the circumstances under which the 4-year replacement period under section 1033(e)(2) of the Code is extended for livestock sold on account of drought. The Appendix to this notice contains a list of the counties that experienced exceptional, extreme, or severe drought during the preceding 12-month period ending August 31, 2009. Taxpayers may use this list to determine if an extension is available.
This procedure describes the conditions under which a Regulated Investment Company (RIC) that invests in a public-private investment partnership (PPIP) is treated for purposes of the asset diversification test of section 851(b)(3) of the Code, as if it directly invested in the assets held by the PPIP.
This procedure describes the conditions under which modifications to the terms of certain commercial mortgage loans that are at risk of default will not cause the Service to challenge the tax status of certain securitization vehicles that hold the loans or to assert that those modifications give rise to prohibited transactions.
This announcement includes changes to Revenue Procedure 2007-65. Specifically, the announcement expands the rights of developers, investors, and related parties to enter into agreements for the purchase of the wind farm, any property included in the wind farm, or an interest in the project company to permit a purchase price determined prior to exercise if the parties reasonably believe that the price will not be less than the fair market value of the property at the time the right may be exercised. The announcement also clarifies how section 469 of the Code applies to credits generated by wind energy facilities, clarifies that the revenue procedure only provides safe harbor requirements, and makes conforming changes to the revenue procedure to reflect these three changes. Rev. Proc. 2007-65 modified.
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