The Internal Revenue Service has certified five 2008 model year General Motors Corp. vehicles as meeting the requirements of the Alternative Motor Vehicle Credit for qualified hybrid motor vehicles. The credit amount for each vehicle is:
--Chevrolet Tahoe Hybrid (2WD) --$2,200;
--Chevrolet Tahoe Hybrid (4WD) --$2,200;
--GMC Yukon Hybrid (2WD) --$2,200;
--GMC Yukon Hybrid (4WD) --$2,200; and
--Saturn Vue Green Line --$1,550
This brings the total number of GM certified hybrid vehicles for the 2008 model year to seven. The Chevrolet Malibu Hybrid ($1,300.00) and the Saturn Aura Hybrid ($1,300.00) were previously certified.
IR-2007-210, 2008FED ¶46,222
Other References:
Code Sec. 30B
CCH Reference - 2007FED ¶4059E.0265
CCH Reference - 2007FED ¶4059E.10
Tax Research Consultant
CCH Reference - TRC INDIV: 57,708
The IRS and Treasury Department have issued temporary and proposed regulations adding an additional item of tax return information, concerning total qualified research expenses, which the Treasury Secretary may disclose to the Bureau of the Census (Bureau) for use in the latter's annual Survey of Industrial Research and Development. The regulation permits disclosure of such data from the taxpayers' Forms 6765, Credit for Increasing Research Activities.
The amendment to the regulation is effective on December 31, 2007 and is applicable to disclosures to the Bureau on or after that date. The applicability of the amendment expires on or before December 28, 2010.
The text of the temporary regulation also serves as the text of the proposed regulation. Written or electronic comments regarding the proposed regulation have been requested, and must be received by March 31, 2008.
T.D. 9373, 2008FED ¶47,010
T.D. 9373, FINH ¶43,115
Proposed Regulations, NPRM REG-147832-07, 2008FED ¶49,783
Proposed Regulations, NPRM REG-147832-07, FINH ¶41,130
Other References:
Code Sec. 6103
CCH Reference - 2007FED ¶36,886B
CCH Reference - 2007FED ¶36,886C
CCH Reference - FINH ¶20,435.30
Tax Research Consultant
CCH Reference - TRC IRS: 9,254
The IRS has issued proposed, temporary and final regulations concerning deductions for contributions to trusts maintained for decommissioning nuclear power plants. The new rules, which affect taxpayers that own interests in nuclear power plants, reflect changes made to Code Sec. 468A by the Energy Policy Act of 2005 (P.L. 109-58). The text of the temporary regulations also serves as the text of the proposed regulations.
Under Code Sec. 468A, all decommissioning costs of both unregulated and regulated nuclear power plants can be funded by deductible contributions to a qualified nuclear decommissioning fund. A plant's pre-1984 decommissioning costs can be funded by increasing the annual deductible contributions over the remaining useful life of the plant. Further, a taxpayer can contribute, in a single year, all or any portion of the amount needed to fund pre-1984 costs that were not previously funded. Such a special transfer is not deductible in full in the year of the contribution, but is allowed ratably over the remaining useful life of the plant.
Useful Life
Under the temporary regulations, for plants that were regulated by a public utility commission (PUC) before 2006, the useful life of the plant begins on the first day of the tax year that includes the date the plan began commercial operations and ends on the last day of the tax year that includes the estimated date on which the plant will no longer be included in the taxpayer's rate base for ratemaking purposes. For other plants, any reasonable method may be used to determine the end of the estimated useful life. The temporary regulations eliminate the requirement that adjustments must be made to the estimated useful life to reflect changes in PUC assumptions regarding useful life.
Special Transfers
The temporary regulations provide rules for calculating the maximum special transfer amount. In addition, rules are provided concerning transfers of property other than cash and transfers of qualified nuclear decommissioning funds to related persons. Where a fund is transferred to a related person, the regulations provide that the transferee's ruling amounts will be adjusted to offset any inappropriate benefit provided by the resultant acceleration of deductions.
Schedules of Ruling Amounts
The temporary regulations provide that, for a plant that is subject to PUC regulation, the assumptions used by the PUC in determining decommissioning costs must be provided in the submission of the proposed schedule of ruling amounts. However, the PUC's assumptions need not be used in calculating the proposed schedule. The taxpayer bears the burden of establishing that the requested schedule is based on reasonable assumptions. A taxpayer that owns an interest in a deregulated nuclear plant may submit assumptions used by a PUC that formerly had jurisdiction over the plant or other industry standards as alternative means of demonstrating the proposed schedule of ruling amounts was calculated on a reasonable basis.
Effective Date
The temporary regulations apply beginning on December 31, 2007, with respect to tax years ending on or after that date. For the period from January 1, 2006, to December 31, 2007, taxpayers may use any reasonable method that is consistent with Code Sec. 468A to determine the schedule of ruling amounts or the schedule of deduction amounts.
Comments and Hearing
Written or electronic comments and requests for a public hearing on the proposed regulations must be received by March 31, 2008.
T.D. 9374, 2008FED ¶47,011
Proposed Regulations, NPRM REG-147290-05, 2008FED ¶49,784
Other References:
Code Sec. 468A
CCH Reference - 2007FED ¶21,931
CCH Reference - 2007FED ¶21,932
CCH Reference - 2007FED ¶21,933
CCH Reference - 2007FED ¶21,934
CCH Reference - 2007FED ¶21,935
CCH Reference - 2007FED ¶21,936
CCH Reference - 2007FED ¶21,937
CCH Reference - 2007FED ¶21,938
CCH Reference - 2007FED ¶21,939
CCH Reference - 2007FED ¶21,939C
Tax Research Consultant
CCH Reference - TRC ACCTNG: 12,208
The IRS has announced that it will issue regulations under Code Sec. 367 to clarify how the two exceptions in Reg. §1.367(a)-3(d)(2)(vi)(B) (the "coordination rule") apply to certain outbound reorganization transactions. The first exception will be modified to require that a basis adjustment for unrecognized gain be made to the stock of the foreign acquiring corporation. Any unrecognized gain that is not preserved in the basis will be subject to Code Sec. 367(a) and (d). The second exception will be modified to limit Code Sec. 351 transfers that also qualify as Code Sec. 361 exchanges so that they are eligible for only the first exception.
The announcement of the planned issuance of regulations is in response to certain transactions designed to avoid U.S. income tax. The regulations will be effective for transactions on or after December 28, 2007. However, the IRS reserves the right to challenge transactions undertaken prior to this announcement where appropriate under appropriate provisions and judicial doctrines.
Specifically, the first exception, contained in Reg. §1.367(a)-3(d)(2)(vi)(B)(1)(i), will be modified to clarify that the basis adjustment required by Code Sec. 367(a)(5) must be made to the stock of the foreign requiring corporation received by domestic corporate shareholders of the U.S. transferror in the reorganization such that the appropriate amount of unrecognized gain in the U.S. transferror's property is reflected in such stock. The result is that the basis adjustment requirement cannot be satisfied by adjusting the basis of the stock of the foreign acquiring corporation held by such shareholders prior to the reorganization. Further, the regulations will clarify that, to the extent the appropriate amount of unrecognized gain in the U.S. transferror's property cannot be preserved in the stock of the foreign acquiring corporation, the U.S. transferror's transfer of property to the foreign acquiring corporation will be subject to Code Sec. 367(a) and (d).
The second exception, found in Reg. §1.367(a)-3(d)(2)(vi)(B)(2), will be modified to clarify that the exception will not apply to a Code Sec. 351 transfer that also qualifies as a Code Sec. 361 exchange. Thus, a Code Sec. 351 transfer that is also a Code Sec. 361 exchange may only qualify, if at all, for the first exception.
Notice 2008-10, 2008FED ¶46,225
Other References:
Code Sec. 367
CCH Reference - 2007FED ¶16,667.01
CCH Reference - 2007FED ¶16,667.021
CCH Reference - 2007FED ¶16,667.024
CCH Reference - 2007FED ¶16,667.028
CCH Reference - 2007FED ¶16,667.28
CCH Reference - 2007FED ¶16,667.57
Tax Research Consultant
CCH Reference - TRC INTL: 30,000
CCH Reference - TRC INTL: 30,056
CCH Reference - TRC INTL: 30,352.05
CCH Reference - TRC INTL: 30,354