The chameleon character of interest expense during the rental of a residence.
A significant tax savings opportunity can arise if a taxpayer rents out his personal residence (e.g., due to acceptance of a temporary work assignment away from home) while making payments on a mortgage on the property. The tax savings hinge on Verb 1. hinge on - be contingent on; "The outcomes rides on the results of the election"; "Your grade will depends on your homework"
depend on, depend upon, devolve on, hinge upon, turn on, ride the classification and deductibility of the mortgage interest. Generally under Sec. 163(h)(3), "qualified residence interest" (QRI QRI Tone (T1 to T9)
QRI Qualitative Reading Inventory (reading assessment)
QRI Qualitative Requirements Information
QRI Quality Results Inc (Philippines)
QRI Queue Response Indicator ) is an itemized deduction Itemized Deduction
A deduction from a taxpayer's taxable adjusted gross income that is made up of deductions for money spent on certain goods and services throughout the year. on Schedule A. However, taxpayers have deducted de·duct
v. de·duct·ed, de·duct·ing, de·ducts
1. To take away (a quantity) from another; subtract.
2. To derive by deduction; deduce.
v.intr. interest expense incurred during a rental period in at least three different ways:
* As passive activity interest (PAI PAI plasminogen activator inhibitor.
PAI Plasminogen activator inhibitor, see there ) on Schedule E.
* As QRI on Schedule A.
* As QRI on Schedule E.(1)
Methods of Reporting
Under the first method, the interest is treated as PAI from a rental activity, subject to the Sec. 469 passive activity loss (PAL (1) (Programmable Array Logic) A type of programmable logic chip (PLD) that contains arrays of programmable AND gates and predefined OR gates. PALs are defined by their number of inputs and outputs; for example, a 22v10 PAL means 22 inputs and 10 outputs. ) rules. Thus, the expenses are reported on Form 8582, Passive Activity Loss Limitations, and are deducted on Schedule E to the extent allowed by Sec. 469.
Some taxpayers have taken the position that Sec. 469(j)(7) excludes QRI from the PAL rules; thus, they deduct de·duct
v. de·duct·ed, de·duct·ing, de·ducts
1. To take away (a quantity) from another; subtract.
2. To derive by deduction; deduce.
v.intr. QRI in full on Schedule A, while reporting other expenses and income attributable to the rental as from a passive activity. This position significantly decreases the amount of PAL (or may create passive activity income) for each tax year the residence is rented. Such a position may allow formerly limited PALs to be currently deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). . Nevertheless, the QRI may be subject to the Sec. 68(a) 3% phaseout phase·out
A gradual discontinuation. of itemized deductions.
The third position is reporting all rental income Noun 1. rental income - income received from rental properties
income - the financial gain (earned or unearned) accruing over a given period of time and expenses (other than interest) on Form 8582, and deducting the interest as QRI on Schedule E.(2) This position also decreases the tax-payer's PAL and/or increases passive activity income; however, the deduction of the interest on Schedule E reduces the taxpayer's adjusted gross income (AGI (Artificial General Intelligence) A machine intelligence that resembles that of a human being. Considered impossible by many, most artificial intelligence (AI) research, projects and products deal with specific applications such as industrial robots, playing chess, ) for the current year and is not limited by the 3% phaseout.(3)
Assuming that a taxpayer has other PALs and/or high AGI, the treatment of mortgage interest on the rental of one's residence can significantly affect tax liability. See the comprehensive example on pages 392-395.
Which of the three reporting methods is correct? Under a strict reading of the Code and regulations, there appears to be more than one way of reporting such interest.(4) Depending on the facts and circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact.
2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , there may be substantial authority to support the third or the first position--both of which allow the interest deduction Interest deduction
An interest expense, such as interest on a margin account, that is allowed as a deduction for tax purposes. to be taken on Schedule E. The third position is the most favorable fa·vor·a·ble
1. Advantageous; helpful: favorable winds.
2. Encouraging; propitious: a favorable diagnosis.
3. from a taxpayer standpoint, because the interest expense reduces AGI and is deductible without regard to the PAL rules.(5)
The Origin of the Problem
In general, Sec. 469(c)(2) subjects any rental activity to the PAL rules. However, Sec. 469(j)(10) provides that if Sec. 280A(c)(5) applies to the rental of the taxpayer's residence, Sec. 469 does not apply, and Sec. 280A controls the deduction of all related expenses.
Sec. 280A(c)(5) generally limits deductions attributable to rental use when a taxpayer uses a residence for personal use and rents it during the same tax year. Thus, if a taxpayer uses a dwelling dwelling
an abnormality of gait in a horse in which there is a momentary hesitation before the foot is placed on the ground. unit as a residence during the tax year and Sec. 280A(c)(5) limits the deductions attributable to rental use, Sec. 469 will not apply. If Sec. 280A(c)(5) applies, an allocation of expenses between rental and personal use is required, and any loss attributable to the rental use is disallowed and carried over to the next year.
However, Sec. 280A(d)(4) provides that if the dwelling unit was used as a residence for any day during the tax year that occurs before or after a "qualified rental period" (QRP QRP Qualified Retirement Plan
QRP Quality Replacement Parts (auto repair industry)
QRP Low Power Transmitter (ham radio; 5 watts or less output)
QRP Qualified Recycling Program
QRP Questionable Refund Program ), Sec. 280A(c)(5) does not apply; thus, under Sec. 469(c)(2), rental of the principal residence will be subject to the PAL rules. Sec. 469(j)(7) provides that PALs are computed without regard to QRI.
Sec. 280A(d)(4)(B) defines a QRP as a consecutive period of (1) 12 or more months that begins or ends in such tax year, or (2) less than 12 months that begins in such tax year and ends with the sale or exchange of the residence, for which the unit is rented, or held for rental, at fair market value (FMV FMV - full-motion video ).
Example: A's employer plans to transfer A to a new work location on Aug. 1, 1995, for 12 months. A rents out his principal residence under a one-year lease beginning Aug. 1, 1995. The rental period is a consecutive period of 12 or more months, so that it is a QRP under Sec. 280A(d)(4)(B)(i). Thus, A's personal use of the residence from Jan. 1-July 30, 1995 will not count as personal use under Sec. 280A(c)(5). Thus, Sec. 280A does not apply, and the rental income and expenses will be subject to Sec. 469.
The first issue, then, is whether interest paid on the rental is QRI. If QRI exists, the next issue is the proper reporting of the deduction (either on Schedule A as QRI, or on Schedule E as permitted by Sec. 62(a)(4)).
Sec. 163(h)(3) defines QRI as interest paid or accrued ac·crue
v. ac·crued, ac·cru·ing, ac·crues
1. To come to one as a gain, addition, or increment: interest accruing in my savings account.
2. during the tax year on acquisition or home equity debt, with respect to any "qualified residence" of the taxpayer. Sec. 163(h)(4)(A)(i) defines a "qualified residence" as the principal residence (within the meaning of Sec. 1034) of the taxpayer and one other residence used by the taxpayer as a residence (as defined in Sec. 280A(d)(1)).
For this purpose, Temp. Regs. Sec. 1.163-10T(p)(2) provides that a taxpayer cannot have more than one principal residence at any one time. Sec. 163(h)(3)(A) provides that the determination of whether any property is the taxpayer's qualified residence is made at the time the interest is accrued. Thus, for the interest to be QRI, the taxpayer's residence must meet the "principal residence" definition of Sec. 1034 or the "second residence" definition of Secs. 163(h)(4)(A)(i)(II) and 280A(d)(1).
* Principal residence
Sec. 1034 allows a taxpayer to defer de·fer 1
v. de·ferred, de·fer·ring, de·fers
1. To put off; postpone.
2. To postpone the induction of (one eligible for the military draft).
v.intr. gain recognition on the sale of a principal residence by reinvesting, within a certain time, the proceeds in a new principal residence. Thus, one way to establish QRI is to rely on the Sec. 1034 principal residence definition. For rental periods of one year or less, it may be relatively easy to establish one's rented home as the principal residence; for extended rental periods, it may be more difficult. For extended rental periods, all of the Sec. 1034 requirements must be met to make the argument that the rented home is the principal residence.
Regs. Sec. 1.1034-1(c)(3)(i) provides that, in the case of a taxpayer using more than one property as a residence, the determination as to whether property is used by the taxpayer as his principal residence depends on the facts and circumstances, including the taxpayer's good faith. The mere fact that property is (or has been) rented is not determinative that such property is not used by the taxpayer as his principal residence. Further, the fact that he temporarily rents out the new residence during the period he vacates the old residence may not, in the light of all the facts and circumstances, prevent the new residence from being considered as the taxpayer's principal residence.
Thus, it is reasonably clear that a taxpayer who is temporarily away from his principal residence, but returns to his residence prior to its sale, would qualify for Sec. 1034 treatment. However, a taxpayer who is temporarily away from his principal residence and is considered to have abandoned it cannot use Sec. 1034, because the residence is no longer the taxpayer's principal residence.(6)
The taxpayer's chances of proving that the rented property has not been abandoned as his principal residence are improved if he vacates it with a manifest manifest 1) adj., adv. completely obvious or evident. 2) n. a written list of goods in a shipment.
MANIFEST, com. law. A written instrument containing a true account of the cargo of a ship or commercial vessel.
2. intent to return. This intent is not negated if the taxpayer's failure to return is due to factors beyond his control.(7) In addition, Regs. Sec. 1.1034-1(c)(3)(i) specifies that the fact that property is temporarily rented does not mean that it cannot be a principal residence. Rather, this depends on the facts; the argument is certainly stronger if the taxpayer's assignment is temporary (i.e., one to three years) and he actually moves back into the residence on completion of the temporary assignment.(8)
If the taxpayer moves back to the same general location, but not back into the claimed "principal residence," the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. may argue that Sec. 1034 does not apply. Rather, the residence was converted to business use; thus, the associated interest may be properly includible under Sec. 469.
The courts have held that when a taxpayer vacates his residence and rents another (e.g., a house or apartment), his residence for Sec. 1034 purposes was the rented dwelling, not the owned one.(9) Thus, a taxpayer must argue against this position, the Temp. Regs. Sec. 1.163-10T(p)(2) requirement that the taxpayer can have only one principal residence at one time, and Sec. 163(h)(3)(A)'s requirement that interest is classified when accrued.
If the taxpayer cannot meet the Sec. 1034 test and the "one principal residence at a time" rule, perhaps the Sec. 163(h)(4)(A)(i)(II) "second residence" test can be met.
* Second residence
"Second residence" is defined in Sec. 163(h)(4)(A)(i)(II) and Temp. Regs. Sec. 1.163-10T(p)(3). As previously noted, a residence rented by the taxpayer will be a "second residence" only if it used by the taxpayer during the tax year as a residence within the meaning of Sec. 280A(d)(1). Under that section, a taxpayer uses a dwelling as a residence if he or a related party uses it for personal purposes for more than the greater of (1) 14 days or (2) 10% of the number of days during such year for which the residence is rented at FMV.
If the residence is rented for a QRP and the taxpayer lives in it least 34 days (e.e., more than 10% x 331) during both the first and last years of the temporary assignment, the interest paid in both years will be QRI, and will not have to be allocated between rental and nonrental use.
For intervening tax years in which the taxpayer does not personally use the residence, the residence will not be a second residence; thus, unless the taxpayer can successfully argue that the dwelling is a Sec. 1034 principal residence, the interest will not be QRI, and most likely will be PAI under Sec. 469.
* Deducting interest in the absence of a QRP
If the taxpayer rents out his dwelling for a period that is not a QRP, the treatment of the interest depends on the taxpayer's personal use of the dwelling. If the Sec. 280A(d)(1) personal use test is met during a tax year, Sec. 280A(c)(5) would apply to disallow To exclude; reject; deny the force or validity of.
The term disallow is applied to such things as an insurance company's refusal to pay a claim. and postpone post·pone
tr.v. post·poned, post·pon·ing, post·pones
1. To delay until a future time; put off. See Synonyms at defer1.
2. To place after in importance; subordinate. any loss from the rental period, while the interest expense allocable al·lo·ca·ble
Capable of being allocated.
Adj. 1. allocable - capable of being distributed
distributive - serving to distribute or allot or disperse to the personal use period would be QRI. If the personal use test is not met, the rental would likely be a passive activity and the interest expense allocated to the rental period would be PAI; the portion (if any) of the interest allocated to personal use might be investment interest deductible to the extent of net investment income.(10)
* Deducting QRI on Schedule E
Under the "second residence" test, the character of interest expense may change annually, depending on whether the taxpayer personally uses the residence during the tax year. This determination appears to be supported by the legislative histories of Secs. 280A(d)(4) and 469. The General Explanation of the Revenue Act of 1978,(11) which enacted Sec. 280A(d)(4), stated that Congress did not believe that the personal use of a principal residence for a portion of the tax year should result in the disallowance dis·al·low
tr.v. dis·al·lowed, dis·al·low·ing, dis·al·lows
1. To refuse to allow: "[The government] of deductions for the period when the residence has been converted to rental property; the Senate Finance Committee Report(12) provided that the determination of whether a unit is a principal residence (within the meaning of Sec. 1034) depends on the facts and circumstances of each particular case. The Joint Committee Report on the Black Lung black lung: see pneumoconiosis. Benefits Revenue Act of 1981,(13) which amended Sec. 280A(d)(4), stated that under prior law, Sec. 280A did not apply in the year a taxpayer converted a personal residence into a rental unit (or a rental unit into a personal residence), unless the dwelling unit was rented to a family member.
Moreover, explaining the active participation standard required to obtain the $25,000 offset for rental real estate activities, the General Explanation of the Tax Reform Act of 1986(14) (the "Blue Book") stated that in some cases, an individual could hold for rental a residence that he used part time, or that previously was and at some future time might be his primary residence.
Thus, it appears that taxpayers are required to determine, on an annual basis, whether they have converted their residence to a rental activity, or whether they hold the rented property solely as a principal residence.
Sec. 62(a)(4) allows a deduction for expenses attributable to property held for the production of rents. The legislative history referred to above and Sec. 62(a)(4) provide substantial authority to deduct the interest expense on Schedule E, regardless of whether the interest is QRI. If the interest is not QRI, it is PAI reported on Schedule E to the extent allowed by Sec. 469. If the interest is QRI, it will not be subject to the PAL rules, and can be deducted in full on Schedule E.
This result is achieved by a literal In programming, any data typed in by the programmer that remains unchanged when translated into machine language. Examples are a constant value used for calculation purposes as well as text messages displayed on screen. In the following lines of code, the literals are 1 and VALUE IS ONE. reading of the Code and regulations. In addition, the Blue Book also provides support for this position,(15) but it was written prior to the enactment of Sec. 469(j)(10) by Section 1005(a)(9) of the Technical and Miscellaneous Revenue Act of 1988. As previously noted, Sec. 469(j)(10) provides that Sec. 280A and Sec. 469 are mutually exclusive Adj. 1. mutually exclusive - unable to be both true at the same time
incompatible - not compatible; "incompatible personalities"; "incompatible colors" .
The Blue Book stated that interest on debt secured by the taxpayer's residence or a second residence is not subject to limit under the PAL rules if the interest meets the definition of QRI. Thus, if a taxpayer rents out his vacation home Vacation Home
A home separate from an individual's primary residence that is used for recreational purposes and may also be rented out at unused times.
For tax purposes, those who rent their vacation homes may result in a lower amount of allowable expense (that qualifies as a second residence) and a portion of the mortgage interest (that meets the definition of QRI) is allocable to rental use of the home and would otherwise be treated as PAI, the interest expense is not subject to disallowance under the passive activity rules.
Thus, under the current Code and regulations, there appears to be substantial authority to report QRI on Schedule E without limitation by either Sec. 469 or 280A.
Deducting QRI on Schedule A
An alternative argument supporting a deduction of QRI on Schedule A is that the taxpayer's property is simultaneously a principal residence and a rental activity. In Bolaris,(16) a 1985 (i.e., pre-PAL rules) decision, the taxpayers tried to sell their residence, then moved to a new residence, tried again to sell the old residence, rented it out, then sold it. Reversing the Tax Court, the Ninth Circuit permitted the taxpayers to defer the gain on sale under Sec. 1034, while also allowing depreciation and other rental expenses incurred during the rental period.(17) The IRS did not contest the taxpayers' deduction of interest expense on Schedule A; at that time, the interest was deductible under Sec. 163, regardless of whether the residence was held for the production of income.(18) However, the result would likely differ today, after enactment of the PAL and QRI rules.
The Tax Court's opinion in Bolaris had been grounded on the legislative history of Sec. 1034, which provided that the term "residence" is used to distinguish between property used in a trade or business and property held for the production of income.(19) The Tax Court had held that the taxpayer lacked a profit motive, so that rental deductions in excess of rental income were nondeductible non·de·duct·i·ble
Not deductible, especially for income-tax purposes.
Adj. 1. nondeductible - not allowable as a deduction
deductible - acceptable as a deduction (especially as a tax deduction) .
Finally, it may be possible to have a QRP, and have two principal residences under Sec. 1034. This will be the case if a taxpayer rents out an old principal residence prior to its sale, and has also acquired a new principal residence. Temp. Regs. Sec. 1.163-10T(p)(2)'s requirement that the taxpayer have only one principal residence at a time would bar the interest on the old residence from being QRI, unless during the year of sale the taxpayer lived in the old residence long enough to satisfy the "second residence" requirement.
The characterization A rather long and fancy word for analyzing a system or process and measuring its "characteristics." For example, a Web characterization would yield the number of current sites on the Web, types of sites, annual growth, etc. of interest expense attributable to a rented residence is a complex task. Depending on the facts and circumstances, the interest can be classified as QRI, PAI or perhaps even investment interest. While the mechanical rules defining second residences provide some certainty for the QRI classification and a deduction on Schedule E (without limitation under the PAL rules) for years in which the rental period begins and ends, taking this position in the intervening years (if any) of the rental period may be more difficult to substantiate To establish the existence or truth of a particular fact through the use of competent evidence; to verify.
For example, an Eyewitness might be called by a party to a lawsuit to substantiate that party's testimony. . To prevail in the intervening years, the Years, The
the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109]
See : Time taxpayer must meet the principal residence test and have only one principal residence at a time. If these requirements can be met, the taxpayer should benefit each year by taking advantage of the best reporting position available.
RELATED ARTICLE: Comprehensive Example
Taxpayer T owns a home he purchased a few years ago with a $300,000, 8.5% mortgage. During 1995, T earns wages of $140,000, has $10,000 each of taxable interest income and dividends, has one child and files a joint return. T also holds 25% ownership interests in several apartment buildings that he treats as one passive activity, which produce $20,000 of PALs annually. T has a suspended sus·pend
v. sus·pend·ed, sus·pend·ing, sus·pends
1. To bar for a period from a privilege, office, or position, usually as a punishment: suspend a student from school. PAL carryover carryover n. in taxation accounting, using a tax year's deductions, business losses or credits to apply to the following year's tax return to reduce the tax liability. (See: carryback) of $60,000. Other items of income and deduction are set forth in the examples below.
T works at his company's corporate headquarters, but has been temporarily assigned to a job location 1,000 miles away for 13 months (encompassing an entire calendar year); his preassignment residence is treated as his principal residence.
1. Having a plane surface; flat.
2. Organized as a table or list.
3. Calculated by means of a table.
resembling a table. DATA OMITTED]
(1)See Bomyea and Marucheck, "Rental of Residences," 21 The Tax Adviser 533 (Sept. 1990), at 548; and Outslay and Weber, "Characterizing a Taxpayer's Living Situation," 20 The Tax Adviser 552' (Aug. 1989), at 559.
(2)To the extent that interest expense attributable to the residence exceeds the Sec. 163(h)(3)(B) $1 million acquisition debt or 163(h)(3)(C) $100,000 home equity debt limit, it should be reported on Form 8582 as PAI. See Secs. 62, 469(c) and (j)(7).
(3)A decrease in AGI will have a beneficial impact on the exemption and itemized deduction phaseouts, and may increase the allowable medical and miscellaneous itemized deductions. See Secs. 151(d)(3), 68, 213(a), 67 and 165(h)(2)(a)(ii).
(4)If there is substantial personal use of the residence, Sec. 280A might control; if not, Sec. 469 appears to control.
(5)See Temp. Regs. Sec. 1.469-2T(d)(3)(ii)(A).
(6)See, e.g., William G. Stolk, 40 TC 345 (1963), aff'd per curiam [Latin, By the court.] A phrase used to distinguish an opinion of the whole court from an opinion written by any one judge.
Sometimes per curiam signifies an opinion written by the chief justice or presiding judge; it can also refer to a brief oral announcement , 326 F2d 760 (2d Cir. 1964) (13 AFTR AFTR American Federal Tax Reports (Prentice-Hall)
AFTR Americans For Tax Reform
AFTR Air Force Training Ribbon
AFTR Air Force Training Record
AFTR atrophy, fasciculation, tremor, rigidity
AFTR Atomic Frequency Time Reference 2d 535, 64-1 USTC USTC University of Science and Technology of China
USTC United States Tax Cases (Commerce Clearing House)
USTC United States Transportation Command (see USTRANSCOM) [paragraph]9928); Rene A. Stiegler, Jr., TC Memo 1964-57; and Ann K. Demeter, TC Memo 1971-209.
(7)See, e.g., Ralph L. Trisko, 29 TC 515 (1957), acq. 1959-1 CB 5.
(8)Facts that will be considered include (1) the length of the taxpayer's assignment (see Trisko, id.); (2) the length of the lease; (3) whether the house was rented furnished fur·nish
tr.v. fur·nished, fur·nish·ing, fur·nish·es
1. To equip with what is needed, especially to provide furniture for.
2. (perhaps indicating an intent to return); and (d) whether the house was listed for sale with local brokers (indicating no intent to return). See Handler A software routine that performs a particular task. It often refers to a routine that "handles" an exception of some kind, such as an error, but it can refer to mainstream processes as well. The term is typically used in operating systems and other system software. , "Acquisition, Financing, Refinancing Refinancing
An extension and/or increase in amount of existing debt. and Sale or Exchange of Residence," 179-4th T.M.
(9)Richard T. Houlette, 48 TC 350 (1967). See also Stolk, note 6, 40 TC at 353, in which the Tax Court, citing Dwyer v. Matson, 163 F2d 299, 302 (10th Cir. 1947) stated: "[Residence] does not mean ...on'es permanent place of abode One's home; habitation; place of dwelling; or residence. Ordinarily means "domicile." Living place impermanent in character. The place where a person dwells. Residence of a legal voter. Fixed place of residence for the time being. , where he intends to live all his days, or for an indefinite INDEFINITE. That which is undefined; uncertain.
INDEFINITE, NUMBER. A number which may be increased or diminished at pleasure.
2. When a corporation is composed of an indefinite number of persons, any number of them consisting of a majority of those or unlimited time; nor does it mean ...one's residence for a temporary purpose, with the intention of returning to his former residence when that purpose has been accomplished, but means ... one's actual home ... whether he intends to reside there permanently, or for a definite or indefinite length of time."
(10)The argument is that the taxpayer is not personally using the dwelling unit, but is holding it as an investment; thus, the Temp. Regs. Sec. 1.163-8T interest tracing rules would classify clas·si·fy
tr.v. clas·si·fied, clas·si·fy·ing, clas·si·fies
1. To arrange or organize according to class or category.
2. To designate (a document, for example) as confidential, secret, or top secret. the interest expense as investment interest. See Sec. 163(d)(3) and (5).
(11)Staff of the Joint Committee on Taxation, General Explanation of the Revenue Act of 1978, 95th Cong., 2d Sess. 346 (1978).
(12)Senate Finance Committee Report on H.R. 6715, 95th Cong., 2d Sess. 20 (1978).
(13)Summary Proposal by the Joint Committee on Taxation (12/21/81).
(14)Staff of the Joint Committee on Taxation, General Explanation of the Tax Reform Act of 1986, 99th Cong., 2d Sess. 243 (1986).
(15)Id., at 218.
(16)Stephen Bolaris, 776 F2d 1428 (9th Cir. 1985) (56 AFTR2d 85-6472', 85-2 USTC [paragraph]9822), aff'g, rev'g and rem'g 81 TC 840 (1983).
(17)The Ninth Circuit's opinion in Bolaris, id., has been cited with approval in subsequent cases. See, e.g., David boyd David Boyd may refer to:
(18)See Bolaris, note 16, at 85-2 USTC 90,267, n. 1.
(19)S. Rep. No. 82-781, 82d Cong., 1st Sess. 32 (1951), 1951-2 CB 566.