us-irs-revenue-rulings-irb-2019-7-pdf•Internal Revenue Bulletin 2019-7 (PDF rendition): IRS Revenue Rulings
Internal Revenue Bulletin 2019-7 (PDF rendition): IRS Revenue Rulings
us-irs-revenue-rulings-irb-2019-7-pdfInternal Revenue Bulletin 2019-7 (PDF rendition): IRS Revenue RulingsGuidance
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HIGHLIGHTS OF THIS ISSUE These synopses are intended only as aids to the reader in identifying the subject matter covered. They may not be relied upon as authoritative interpretations. INCOME TAX Rev. Rul. 2019–04, page 567. Federal rates; adjusted federal rates; adjusted federal long- term rate, the long-term exempt rate, and the blended annual rate. For purposes of sections 382, 1274, 1288, 7872 and other sections of the Code, tables set forth the rates for February 2019. Finding Lists begin on page ii. Bulletin No. 2019–07 February 11, 2019 The IRS Mission Provide America’s taxpayers top-quality service by helping them understand and meet their tax responsibilities and en- force the law with integrity and fairness to all. Introduction The Internal Revenue Bulletin is the authoritative instrument of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service and for publishing Treasury Decisions, Executive Orders, Tax Conven- tions, legislation, court decisions, and other items of general interest. It is published weekly. It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application of the tax laws, including all rulings that supersede, revoke, modify, or amend any of those previously published in the Bulletin. All published rulings apply retroactively unless other- wise indicated. Procedures relating solely to matters of internal management are not published; however, statements of inter- nal practices and procedures that affect the rights and duties of taxpayers are published. Revenue rulings represent the conclusions of the Service on the application of the law to the pivotal facts stated in the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices, identify- ing details and information of a confidential nature are deleted to prevent unwarranted invasions of privacy and to comply with statutory requirements. Rulings and procedures reported in the Bulletin do not have the force and effect of Treasury Department Regulations, but they may be used as precedents. Unpublished rulings will not be relied on, used, or cited as precedents by Service personnel in the disposition of other cases. In applying published rulings and procedures, the effect of subsequent legislation, regulations, court decisions, rulings, and procedures must be considered, and Service personnel and others concerned are cautioned against reaching the same conclusions in other cases unless the facts and circumstances are substantially the same. The Bulletin is divided into four parts as follows: Part I.—1986 Code. This part includes rulings and decisions based on provisions of the Internal Revenue Code of 1986. Part II.—Treaties and Tax Legislation. This part is divided into two subparts as follows: Subpart A, Tax Conventions and Other Related Items, and Subpart B, Legisla- tion and Related Committee Reports. Part III.—Administrative, Procedural, and Miscellaneous. To the extent practicable, pertinent cross references to these subjects are contained in the other Parts and Subparts. Also included in this part are Bank Secrecy Act Administrative Rul- ings. Bank Secrecy Act Administrative Rulings are issued by the Department of the Treasury’s Office of the Assistant Sec- retary (Enforcement). Part IV.—Items of General Interest. This part includes notices of proposed rulemakings, disbar- ment and suspension lists, and announcements. The last Bulletin for each month includes a cumulative index for the matters published during the preceding months. These monthly indexes are cumulated on a semiannual basis, and are published in the last Bulletin of each semiannual period. The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate. February 11, 2019Bulletin No. 2019–07 Part I. Rulings and Decisions Under the Internal Revenue Code of 1986 Section 1274.— Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property (Also Sections 42, 280G, 382, 467, 468, 482, 483, 1288, 7520, 7872.) Rev. Rul. 2019–04 This revenue ruling provides various prescribed rates for federal income tax purposes for February 2019 (the current month). Table 1 contains the short-term, mid-term, and long-term applicable fed- eral rates (AFR) for the current month for purposes of section 1274(d) of the Internal Revenue Code. Table 2 contains the short- term, mid-term, and long-term adjusted applicable federal rates (adjusted AFR) for the current month for purposes of sec- tion 1288(b). Table 3 sets forth the ad- justed federal long-term rate and the long- term tax-exempt rate described in section 382(f). Table 4 contains the appropriate percentages for determining the low- income housing credit described in sec- tion 42(b)(1) for buildings placed in ser- vice during the current month. However, under section 42(b)(2), the applicable per- centage for non-federally subsidized new buildings placed in service after July 30, 2008, shall not be less than 9%. Finally, Table 5 contains the federal rate for de- termining the present value of an annuity, an interest for life or for a term of years, or a remainder or a reversionary interest for purposes of section 7520. REV. RUL. 2019–04 TABLE 1 Applicable Federal Rates (AFR) for February 2019 Period for Compounding AnnualSemiannualQuarterlyMonthly Short-term AFR2.57%2.55%2.54%2.54% 110% AFR2.83%2.81%2.80%2.79% 120% AFR3.08%3.06%3.05%3.04% 130% AFR3.35%3.32%3.31%3.30% Mid-term AFR2.63%2.61%2.60%2.60% 110% AFR2.89%2.87%2.86%2.85% 120% AFR3.15%3.13%3.12%3.11% 130% AFR3.42%3.39%3.38%3.37% 150% AFR3.96%3.92%3.90%3.89% 175% AFR4.62%4.57%4.54%4.53% Long-term AFR2.91%2.89%2.88%2.87% 110% AFR3.21%3.18%3.17%3.16% 120% AFR3.50%3.47%3.46%3.45% 130% AFR3.80%3.76%3.74%3.73% REV. RUL. 2019–04 TABLE 2 Adjusted AFR for February 2019 Period for Compounding AnnualSemiannualQuarterlyMonthly Short-term adjusted AFR1.95%1.94%1.94%1.93% Mid-term adjusted AFR1.99%1.98%1.98%1.97% Long-term adjusted AFR2.20%2.19%2.18%2.18% Bulletin No. 2019–07February 11, 2019 567 REV. RUL. 2019–04 TABLE 3 Rates Under Section 382 for February 2019 Adjusted federal long-term rate for the current month2.20% Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted federal long-term rates for the current month and the prior two months.) 2.51% REV. RUL. 2019–04 TABLE 4 Appropriate Percentages Under Section 42(b)(1) for February 2019 Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July 30, 2008, shall not be less than 9%. Appropriate percentage for the 70% present value low-income housing credit7.64% Appropriate percentage for the 30% present value low-income housing credit3.27% REV. RUL. 2019–04 TABLE 5 Rate Under Section 7520 for February 2019 Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years, or a remainder or reversionary interest 3.2% Section 42.—Low-Income Housing Credit The applicable federal short-term, mid-term, and long-term rates are set forth for the month of Feb- ruary 2019. See Rev. Rul. 2019 – 04, page 567. Section 280G.—Golden Parachute Payments The applicable federal short-term, mid-term, and long-term rates are set forth for the month of Feb- ruary 2019. See Rev. Rul. 2019 – 04, page 567. Section 382.—Limitation on Net Operating Loss Carryforwards and Certain Built-In Losses Following Ownership Change The adjusted applicable federal long-term rate is set forth for the month of February 2019. See Rev. Rul. 2019 – 04, page 567. Section 467.—Certain Payments for the Use of Property or Services The applicable federal short-term, mid-term, and long-term rates are set forth for the month of Feb- ruary 2019. See Rev. Rul. 2019 – 04, page 567. Section 468.—Special Rules for Mining and Solid Waste Reclamation and Closing Costs The applicable federal short-term, mid-term, and long-term rates are set forth for the month of Feb- ruary 2019. See Rev. Rul. 2019 – 04, page 567. Section 482.—Allocation of Income and Deductions Among Taxpayers The applicable federal short-term, mid-term, and long-term rates are set forth for the month of Feb- ruary 2019. See Rev. Rul. 2019 – 04, page 567. Section 483.—Interest on Certain Deferred Payments The applicable federal short-term, mid-term, and long-term rates are set forth for the month of Feb- ruary 2019. See Rev. Rul. 2019 – 04, page 567. Section 1288.—Treatment of Original Issue Discount on Tax-Exempt Obligations The adjusted applicable federal short-term, mid- term, and long-term rates are set forth for the month of February 2019. See Rev. Rul. 2019 – 04, page 567. Section 7520.—Valuation Tables The applicable federal short-term, mid-term, and long-term rates are set forth for the month of Feb- ruary 2019. See Rev. Rul. 2019 – 04, page 567. Section 7872.—Treatment of Loans With Below- Market Interest Rates The applicable federal short-term, mid-term, and long-term rates are set forth for the month of Feb- ruary 2019. See Rev. Rul. 2019 – 04, page 567. February 11, 2019Bulletin No. 2019–07 568 Definition of Terms Revenue rulings and revenue procedures (hereinafter referred to as “rulings”) that have an effect on previous rulings use the following defined terms to describe the effect: Amplifieddescribes a situation where no change is being made in a prior pub- lished position, but the prior position is being extended to apply to a variation of the fact situation set forth therein. Thus, if an earlier ruling held that a principle ap- plied to A, and the new ruling holds that the same principle also applies to B, the earlier ruling is amplified. (Compare with modified, below). Clarifiedis used in those instances where the language in a prior ruling is being made clear because the language has caused, or may cause, some confu- sion. It is not used where a position in a prior ruling is being changed. Distinguisheddescribes a situation where a ruling mentions a previously pub- lished ruling and points out an essential difference between them. Modifiedis used where the substance of a previously published position is being changed. Thus, if a prior ruling held that a principle applied to A but not to B, and the new ruling holds that it applies to both A and B, the prior ruling is modified because it corrects a published position. (Compare withamplifiedandclarified, above). Obsoleteddescribes a previously pub- lished ruling that is not considered deter- minative with respect to future transac- tions. This term is most commonly used in a ruling that lists previously published rul- ings that are obsoleted because of changes in laws or regulations. A ruling may also be obsoleted because the substance has been included in regulations subsequently adopted. Revokeddescribes situations where the position in the previously published ruling is not correct and the correct position is being stated in a new ruling. Supersededdescribes a situation where the new ruling does nothing more than restate the substance and situation of a previously published ruling (or rulings). Thus, the term is used to republish under the 1986 Code and regulations the same position published under the 1939 Code and regulations. The term is also used when it is desired to republish in a single ruling a series of situations, names, etc., that were previously published over a pe- riod of time in separate rulings. If the new ruling does more than restate the sub- stance of a prior ruling, a combination of terms is used. For example,modifiedand supersededdescribes a situation where the substance of a previously published ruling is being changed in part and is continued without change in part and it is desired to restate the valid portion of the previously published ruling in a new ruling that is self contained. In this case, the previously published ruling is first modified and then, as modified, is superseded. Supplementedis used in situations in which a list, such as a list of the names of countries, is published in a ruling and that list is expanded by adding further names in subsequent rulings. After the original ruling has been supplemented several times, a new ruling may be published that includes the list in the original ruling and the additions, and supersedes all prior rul- ings in the series. Suspendedis used in rare situations to show that the previous published rulings will not be applied pending some future action such as the issuance of new or amended regulations, the outcome of cases in litigation, or the outcome of a Service study. Abbreviations The following abbreviations in current use and formerly used will appear in ma- terial published in the Bulletin. A—Individual. Acq.—Acquiescence. B—Individual. BE—Beneficiary. BK—Bank. B.T.A.—Board of Tax Appeals. C—Individual. C.B.—Cumulative Bulletin. CFR—Code of Federal Regulations. CI—City. COOP—Cooperative. Ct.D.—Court Decision. CY—County. D—Decedent. DC—Dummy Corporation. DE—Donee. Del. Order—Delegation Order. DISC—Domestic International Sales Corporation. DR—Donor. E—Estate. EE—Employee. E.O.—Executive Order. ER—Employer. ERISA—Employee Retirement Income Security Act. EX—Executor. F—Fiduciary. FC—Foreign Country. FICA—Federal Insurance Contributions Act. FISC—Foreign International Sales Company. FPH—Foreign Personal Holding Company. F.R.—Federal Register. FUTA—Federal Unemployment Tax Act. FX—Foreign corporation. G.C.M.—Chief Counsel’s Memorandum. GE—Grantee. GP—General Partner. GR—Grantor. IC—Insurance Company. I.R.B.—Internal Revenue Bulletin. LE—Lessee. LP—Limited Partner. LR—Lessor. M—Minor. Nonacq.—Nonacquiescence. O—Organization. P—Parent Corporation. PHC—Personal Holding Company. PO—Possession of the U.S. PR—Partner. PRS—Partnership. PTE —Prohibited Transaction Exemption. Pub. L.—Public Law. REIT—Real Estate Investment Trust. Rev. Proc.—Revenue Procedure. Rev. Rul.—Revenue Ruling. S—Subsidiary. S.P.R.—Statement of Procedural Rules. Stat.—Statutes at Large. T—Target Corporation. T.C.—Tax Court. T.D.—Treasury Decision. TFE—Transferee. TFR—Transferor. T.I.R.—Technical Information Release. TP—Taxpayer. TR—Trust. TT—Trustee. U.S.C.—United States Code. X—Corporation. Y—Corporation. Z—Corporation. Bulletin No. 2019–07February 11, 2019 i Numerical Finding List 1 Bulletin 2019 –7 Announcements: 2019-1, 2019-06 I.R.B.566 Notices: 2019-01, 2019-02 I.R.B.275 2019-02, 2019-02 I.R.B.281 2019-03, 2019-03 I.R.B.350 2019-04, 2019-02 I.R.B.282 2019-05, 2019-02 I.R.B.283 2019-06, 2019-03 I.R.B.353 2019-08, 2019-03 I.R.B.354 2019-09, 2019-04 I.R.B.403 2019-11, 2019-5 I.R.B.430 Proposed Regulations: REG-104259-18, 2019-02 I.R.B.300 REG-104352-18, 2019-03 I.R.B.357 REG-106089-18, 2019-05 I.R.B.431 Revenue Procedures: 2019-1, 2019-01 I.R.B.1 2019-2, 2019-01 I.R.B.106 2019-3, 2019-01 I.R.B.130 2019-4, 2019-01 I.R.B.146 2019-5, 2019-01 I.R.B.230 2019-6, 2019-02 I.R.B.284 2019-7, 2019-01 I.R.B.268 2019-8, 2019-03 I.R.B.347 2019-9, 2019-02 I.R.B.293 2019-10, 2019-02 I.R.B.296 2019-12, 2019-04 I.R.B.401 Revenue Rulings: 2019-03, 2019-02 I.R.B.272 2019-04, 2019-07 I.R.B.567 1 A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2018 –27 through 2018 –52 is in Internal Revenue Bulletin 2018 –52, dated December 27, 2018. February 11, 2019Bulletin No. 2019–07 ii Finding List of Current Actions on Previously Published Items 1 Bulletin 2019 –7 1 A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2018 –27 through 2018 –52 is in Internal Revenue Bulletin 2018 –52, dated December 27, 2018. Bulletin No. 2019–07February 11, 2019 iii INTERNAL REVENUE BULLETIN The Introduction at the beginning of this issue describes the purpose and content of this publication. The weekly Internal Revenue Bulletins are available atwww.irs.gov/irb/. We Welcome Comments About the Internal Revenue Bulletin If you have comments concerning the format or production of the Internal Revenue Bulletin or suggestions for improving it, we would be pleased to hear from you. You can email us your suggestions or comments through the IRS Internet Home Page (www.irs.gov) or write to the Internal Revenue Service, Publishing Division, IRB Publishing Program Desk, 1111 Constitution Ave. NW, IR-6230 Washington, DC 20224. Internal Revenue Service Washington, DC 20224 Official Business Penalty for Private Use, $300
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