From the IRS.
Prior guidance: The Service stressed that the notice does not cover every election or revocation created or affected by the AJCA. In particular, it does not address elections or revocations for which published guidance was issued prior to the notice, including provisions for the:
* Repeal of the exclusion for extraterritorial income (Rev. Proc. 2001-37).
* Treatment of family members as one shareholder for S corporation purposes (Notice 2005-91).
* Election to use the per-ton rate in determining corporate tax on certain international shipping activities (Notice 2005-2).
* Repatriation of foreign dividends back to the U.S. at a reduced tax rate (Notice 2005-10).
* Deduction of state and local general sales tax in lieu of state and local income taxes (Notice 2005-31).
* Disallowance of certain partnership loss transfers (Notice 2005-32).
* Limits on transfer or importation of built-in losses (Notice 2005-70).
Interim rules: The notice discussed elections for:
* Allowing worldwide affiliated groups to allocate interest expense on a worldwide basis.
* Modifying application of the income-forecast method of depreciation.
* Permitting taxpayers that must translate foreign income payments to use the exchange rate in effect on the date they pay the taxes, provided the foreign taxes are denominated in a nonfunctional currency.
* Allowing taxpayers to treat foreign taxes paid or accrued on amounts not constituting income for U.S. tax purposes under a new two-basket approach (general limitation income or financial services income).
* Revoking a Sec. 631(c) election to treat timber cutting as a sale or exchange.
* Permitting costs of less than $15 million for any qualified film or television production to be treated as deductible expenses.
* Allowing taxpayers that realize gain from a qualifying electric transmission transaction to recognize all or part of it over eight years.
* Permitting up to $10,000 of certain reforestation costs as deductible expenses.
* Allowing a co-op to apportion the small ethanol producer credit on a pro-rata basis among its patrons.
* Permitting a co-op to elect to apportion the low sulfur diesel fuel production credit among its patrons eligible to share in patronage dividends.
* Allowing small business refiners to deduct certain costs associated with complying with the Environmental Protection Agency's sulfur regulations.
* Allowing taxpayers to treat certain Alaska natural gas pipelines as being placed in service on Jan. 1, 2014 (and thus depreciable as seven-year property as of that date).
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|Title Annotation:||News Notes|
|Author:||Laffie, Lesli S.|
|Publication:||The Tax Adviser|
|Date:||Jul 1, 2006|
|Previous Article:||Adoption requirements qualified as unforeseen circumstances for principal residence exclusion.|