Internal Revenue Bulletin: 2015-40
October 5, 2015
Table of Contents
The proposed regulations under section 367 primarily narrow the exception to section 367(a) for property transferred to a foreign corporation for use in the conduct of an active trade or business by limiting the exception to only certain classes of property, and eliminate the exception to section 367(d) for transfers of foreign goodwill or going concern value. The regulations also reorganize the regulations under section 367(a) and update cross-references where appropriate.
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 2015.
This revenue procedure supplements Rev. Proc. 2015–3, 2015–1 I.R.B. 129, which sets forth areas of the Internal Revenue Code (Code) on which the Internal Revenue Service will not issue letter rulings or determination letters (no-rule areas). The revenue procedure adds to the list of no-rule areas any issue relating to the qualification, under § 355 and related provisions of the Code, of certain distributions in which property becomes the property of a regulated investment company or a real estate investment trust, the active business is small relative to other assets, or there is a substantial amount of investment assets.
The Tax Increase Prevention Act of 2014 generally extends the application of § 168(k) 50% bonus depreciation, § 168(k)(4) “extension property,” and § 179(f) real property, for property placed in service in 2014. This revenue procedure provides guidance to taxpayers for making certain elections and filing amended returns to avail themselves of these extenders.
This notice is issued concurrently with Rev. Proc. 2015–43, page 467, this Bulletin, and announces that the Treasury Department and the Internal Revenue Service (Service) are studying issues under §§ 337(d) and 355 of the Internal Revenue Code (Code) relating to certain distributions, described in § 355 of the Code, in which property becomes the property of a regulated investment company or a real estate investment trust, the active business is small relative to other assets, or there is a substantial amount of investment assets. The notice describes the transactions that concern the Treasury Department and the Service and requests comments concerning those transactions.
2015 Section 43 Inflation Adjustment: The notice announces the inflation adjustment factor and phase-out amount for the enhanced oil recovery credit for taxable years beginning in the 2015 calendar year. The format of the notice is identical to the format of previously published notices on this issue. The notice concludes that because the reference price for the 2014 calendar year ($87.39) exceeds $28 multiplied by the inflation adjustment factor for the 2014 calendar year ($28 multiplied by 1.6245 = $45.49) by $41.90, the enhanced oil recovery credit for qualified costs paid or incurred in 2015 is phased out completely. The notice also contains the previously published figures for taxable years beginning in the 1991 through 2014 calendar years.
2015 Marginal Production Rates: The notice announces that under § 613A(c)(6)(C) of the Internal Revenue Code, the applicable percentage for purposes of determining percentage depletion on marginal properties for calendar year 2015 is 15 percent. The format of the notice is identical to the format of notices previously published on this issue.
This document contains final rules with revisions to examples that illustrate the controlled group rules applicable to regulated investment companies (RICs). The revised examples illustrate how the controlled group rules affect the RIC asset diversification tests.
Temporary regulations clarify the coordination of transfer pricing rules with other Internal Revenue Code provisions.
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