Internal Revenue Bulletin 2000-14 (PDF rendition): IRS Revenue Rulings

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INCOME TAX
Rev. Rul. 2000–18, page 847.
Recapture of gain on disposition of qualified replacement
property.The transfer of qualified replacement property to a
partnership in exchange for a partnership interest by a taxpayer
that has elected to defer the recognition of gain under section
1042(a) of the Code is a disposition of the qualified replacement
property resulting in recapture of the deferred gain under sec-
tion 1042(e).
Rev. Rul. 2000–19, page 849.
Federal rates; adjusted federal rates; adjusted federal
long-term rate, and the long-term exempt rate.For pur-
poses of sections 1274, 1288, 382, and other sections of the
Code, tables set forth the rates for April 2000.
Notice 2000–20, page 851.
Request for comments on the revision of proposed sec-
tion 987 regulations.This notice discusses the application
of general tax principles to certain abuses regarding foreign
currency losses under section 987 of the Code and an-
nounces a prospective regulatory change to the anti-abuse
rule in the proposed regulations.
Announcement 2000–24, page 855.
This announcement contains corrections to T.D. 8834
(1999–34 I.R.B. 251) relating to the treatment of distributions
to foreign persons.
ESTATE AND GIFT TAX
Announcement 2000–25, page 855.
This announcement contains corrections to T.D. 8819
(1999–20 I.R.B. 5) relating to the use of actuarial tables in
valuing annuities, interests for life or terms of years, and re-
mainder or reversionary interests.
Internal Revenue
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Bulletin No. 2000–14
April 3, 2000
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.
Department of the Treasury
Internal Revenue Service
Finding Lists begin on page ii.
Index for January through March begins on page iv.

April 3, 20002000–14 I.R.B.
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing offi-
cial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly and may be obtained
from the Superintendent of Documents on a subscription
basis. Bulletin contents are consolidated semiannually into
Cumulative Bulletins, which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive 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 in-
ternal management are not published; however, statements
of internal 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,
identifying 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 pub-
lished rulings and procedures, the effect of subsequent leg-
islation, regulations, court decisions, rulings, and proce-
dures must be considered, and Service personnel and oth-
ers concerned are cautioned against reaching the same con-
clusions 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 Subpart B, Legislation 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 Sub-
parts. Also included in this part are Bank Secrecy Act Admin-
istrative Rulings. Bank Secrecy Act Administrative Rulings
are issued by the Department of the Treasury’s Office of the
Assistant Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The first 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 first Bulletin of the succeeding semi-
annual period, respectively.
The IRS Mission
Provide America’s taxpayers top quality service by help-
ing them understand and meet their tax responsibilities
and by applying the tax law with integrity and fairness to
all.
Introduction
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.
For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.

Section 42.—Low-Income
Housing Credit
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2000. See Rev. Rul. 2000–19, page 849.
Section 280G.—Golden
Parachute Payments
Federal short-term, mid-term, and long-term
rates are set forth for the month of April 2000. See
Rev. Rul. 2000–19, page 849.
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 April 2000. See Rev. Rul.
2000–19, page 849.
Section 412.—Minimum Funding
Standards
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2000. See Rev. Rul. 2000–19, page 849.
Section 467.—Certain Payments
for the Use of Property or
Services
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2000. See Rev. Rul. 2000–19, page 849.
Section 468.—Special Rules for
Mining and Solid Waste
Reclamation and Closing Costs
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2000. See Rev. Rul. 2000–19, page 849.
Section 482.—Allocation of
Income and Deductions Among
Taxpayers
Federal short-term, mid-term, and long-term
rates are set forth for the month of April 2000. See
Rev. Rul. 2000–19, page 849.
Section 483.—Interest on
Certain Deferred Payments
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2000. See Rev. Rul. 2000–19, page 849.
Section 642.—Special Rules for
Credits and Deductions
Federal short-term, mid-term, and long-term
rates are set forth for the month of April 2000. See
Rev. Rul. 2000–19, page 849.
Section 721.—Nonrecognition of
Gain or Loss on Contribution
If qualified replacement property is transferred to
a partnership in exchange for a partnership interest
by a taxpayer that has elected to defer the recogni-
tion of gain under section 1042(a) of the Code, is the
transfer a disposition of the qualified replacement
property resulting in recapture of the deferred gain
under section 1042(e) or do the nonrecognition pro-
visions of section 721 apply? See Rev. Rul.
2000–18, on this page.
Section 807.—Rules for Certain
Reserves
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2000. See Rev. Rul. 2000–19, page 849.
Section 846.—Discounted
Unpaid Losses Defined
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2000. See Rev. Rul. 2000–19, page 849.
Section 1042(e).—Recapture of
Gain on Disposition of Qualified
Replacement Property
(Also section 721)
Recapture of gain on disposition of
qualified replacement property.This
ruling holds that the transfer of qualified
replacement property to a partnership in
exchange for a partnership interest by a
taxpayer that has elected to defer the
recognition of gain under section 1042(a)
of the Code is a disposition of the quali-
fied replacement property resulting in re-
capture of the deferred gain under section
1042(e).
Rev. Rul. 2000–18
ISSUE
Whether the transfer of qualified re-
placement property to a partnership in ex-
change for a partnership interest by a tax-
payer that has elected to defer the
recognition of gain under section 1042(a)
of the Internal Revenue Code is a disposi-
tion of the qualified replacement property
resulting in recapture of the deferred gain
under section 1042(e).
FACTS
The taxpayer is a shareholder of Com-
pany A, a closely held domestic C corpo-
ration. Company A maintains an em-
ployee stock ownership plan (ESOP) that
satisfies the requirements of section
4975(e)(7). Company A has one class of
common stock that constitutes employer
securities within the meaning of section
409(l) of the Code. The taxpayer did not
receive the shares in a distribution from a
plan described in section 401(a), or a
transfer pursuant to an option or other
right to acquire stock to which section 83,
422 or 423 applied. The taxpayer sells all
of the Company A shares to the Company
A ESOP and reinvests the proceeds of the
sale in qualified replacement property
(QRP), as defined in section 1042(c)(4),
within 12 months of the date of the sale.
The taxpayer makes a timely election
under section 1042(a) to defer recognition
of the gain realized from the sale of the
qualified securities to the ESOP. Under
section 1042(d), the basis of the QRP is
reduced to reflect the deferred gain on the
sale. After the section 1042 election, the
taxpayer contributes the QRP to a partner-
ship in exchange for an interest in the
partnership.
LAW AND ANALYSIS
Section 1042(a) provides that a tax-
payer or executor may elect in certain
cases not to recognize long-term capital
gain on the sale of “qualified securities”
to an employee stock ownership plan (as
2000–14 I.R.B.847April 3, 2000
Part I. Rulings and Decisions Under the Internal Revenue Code of 1986

April 3, 20008482000–14 I.R.B.
defined in section 4975(e)(7)) or eligible
worker- owned cooperative if the tax-
payer purchases “qualified replacement
property” (as defined in section
1042(c)(4)) within the replacement period
of section 1042(c)(3) and the require-
ments of section 1042(b) and section
1.1042–1T of the Temporary Income Tax
Regulations are satisfied.
A sale of “qualified securities” meets
the requirements of section 1042(b) if: (1)
the qualified securities are sold to an em-
ployee stock ownership plan (as defined
in section 4975(e)(7)) or an eligible
worker-owned cooperative; (2) the plan
or cooperative owns (after application of
318(a)(4)), immediately after the sale, at
least 30 percent of (a) each class of out-
standing stock of the corporation (other
than stock described in section
1504(a)(4)) which issued the securities or
(b) the total value of all outstanding stock
of the corporation (other than stock de-
scribed in section 1504(a)(4)); (3) the tax-
payer files with the Secretary a verified
written statement of the employer whose
employees are covered by the employee
stock ownership plan or an authorized of-
ficer of the cooperative consenting to the
application of sections 4978 and 4979A
with respect to such employer or coopera-
tive; and (4) the taxpayer’s holding period
with respect to the qualified securities is
at least three years (determined as of the
time of the sale).
Section 1042(c)(1) provides that quali-
fied securities are employer securities (as
defined in section 409(l)) which are is-
sued by a domestic C corporation that has
no stock outstanding that is readily trad-
able on an established securities market
and were not received by the taxpayer in a
distribution from a plan described in sec-
tion 401(a) or a transfer pursuant to an op-
tion or other right to acquire stock to
which section 83, 422, or 423 applied (or
to which section 422 or 424 (as in effect
on the day before the date of the enact-
ment of the Revenue Reconciliation Act
of 1990) applied).
The taxpayer must purchase “qualified
replacement property” within the “re-
placement period” which is defined in
section 1042(c)(3) as the period which be-
gins 3 months before the date on which
the sale of qualified securities occurs and
which ends 12 months after the date of
such sale.
Section 1042(c)(4)(A) defines “quali-
fied replacement property” as any secu-
rity issued by a domestic “operating cor-
poration” (as defined in section
1042(c)(4)(B)) which did not, for the tax-
able year preceding the taxable year in
which such security was purchased, have
passive investment income (as defined in
section 1362(d)(3)(C)) in excess of 25
percent of the gross receipts of such cor-
poration for such preceding taxable year
and is not the corporation which issued
the qualified securities that such security
is replacing or a member of the same con-
trolled group of corporations (within the
meaning of section 1563(a)(1)) as such
corporation.
Section 1042(d) provides that the basis
of the taxpayer in qualified replacement
property purchased by the taxpayer dur-
ing the replacement period is reduced by
the amount of gain not recognized by rea-
son of such purchase and the application
of section 1042(a). If more than one item
of qualified replacement property is pur-
chased, the basis of each of such items is
reduced by an amount determined by
multiplying the total gain not recognized
by reason of such purchase and the appli-
cation of subsection (a) by a fraction the
numerator of which is the cost of such
item of property and the denominator of
which is the total cost of all such items of
property.
Section 1042(e)(1) states that “[i]f a
taxpayer disposes of any qualified re-
placement property, then, notwithstanding
any other provision of this title, gain (if
any) shall be recognized to the extent of
the gain which was not recognized under
subsection (a) by reason of the acquisition
by such taxpayer of such qualified re-
placement property.”
The legislative history of section
1042(e) indicates that section 1042(e) was
added to coordinate the requirement that
deferred gain be recognized on the dispo-
sition of any qualified replacement prop-
erty with other nonrecognition provisions
of the Code. “Effective for dispositions
made after the date of enactment, the Act
overrides all other provisions permitting
nonrecognition and requires that gain re-
alized upon the disposition of qualified
replacement property be recognized at
that time.” S. Rep. 99–313, 99th Cong.,
2nd Sess., 1032 (1986), 1986–3 C.B., v. 3,
1032. Thus, gain realized from the dispo-
sition of any qualified replacement prop-
erty by a taxpayer who made an election
under section 1042 must be recognized at
the time of the disposition regardless of
any other nonrecognition provisions of
the Code that may otherwise be applica-
ble.
Section 721(a) provides that generally
no gain or loss is recognized to a partner-
ship or to any of its partners in the case of
a contribution of property to the partner-
ship in exchange for an interest in the
partnership.
Limited exceptions to the rule of sec-
tion 1042(e)(1) are provided in section
1042(e)(3) which provides that the recap-
ture rules of section 1042(e)(1) do not
apply to any transfer of qualified replace-
ment property that occurs: (1) in any reor-
ganization (within the meaning of section
368) unless the person making the elec-
tion under section 1042(a)(1) owns stock
representing control of the acquiring or
acquired corporation and such property is
substituted basis property in the hands of
the transferee; (2) by reason of the death
of the person making the election; (3) by
gift; or (4) in any transaction to which
section 1042(a) applies.
The contribution of qualified replace-
ment property to a partnership in ex-
change for an interest in the partnership is
not a transfer of qualified replacement
property described in any of the excep-
tions in section 1042(e)(3).
In the present situation, the taxpayer
disposed of qualified replacement prop-
erty by contributing it to a partnership in
exchange for an interest in the partner-
ship. Therefore, although a contribution
of property to a partnership in exchange
for an interest in the partnership is ordi-
narily a nonrecognition event under sec-
tion 721, section 1042(e)(1) requires that
any gain realized on the contribution be
recognized to the extent of the gain that
was deferred under section 1042(a).
HOLDING
The transfer of qualified replacement
property to a partnership in exchange for
a partnership interest by a taxpayer that
has elected to defer the recognition of
gain under section 1042(a) is a disposi-
tion of the qualified replacement proper-
ty under section 1042(e). Accordingly,
under section 1042(e), any gain realized
on the disposition is required to be rec-

2000–14 I.R.B.849April 3, 2000
ognized by the taxpayer at the time of
the transfer to the extent of the gain that
was not recognized under section
1042(a) by reason of the acquisition by
the taxpayer of the qualified replacement
property.
EFFECT ON OTHER REVENUE
RULING(S): N/A
PROSPECTIVE APPLICATION: N/A
DRAFTING INFORMATION
The principal author of this revenue
ruling is John Ricotta of the Associate
Chief Counsel (Employee Benefits & Ex-
empt Organizations) (CC:EBEO:Br5).
For further information regarding this
revenue ruling contact John Ricotta on
(202) 622-4290 (not a toll-free call).
Section 1274.—Determination
of Issue Price in the Case of
Certain Debt Instruments Issued
for Property
(Also sections 42, 280G, 382, 412, 467, 468, 482,
483, 642, 807, 846, 1288, 7520, 7872.)
Federal rates; adjusted federal rates;
adjusted federal long-term rate, and
the long-term exempt rate.For purposes
of sections 1274, 1288, 382, and other
sections of the Code, tables set forth the
rates for April 2000.
Rev. Rul. 2000–19
This revenue ruling provides various
prescribed rates for federal income tax
purposes for April 2000 (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 Inter-
nal Revenue Code. Table 2 contains the
short-term, mid-term, and long-term ad-
justed applicable federal rates (adjusted
AFR) for the current month for purposes
of section 1288(b). Table 3 sets forth the
adjusted federal long-term rate and the
long-term tax-exempt rate described in
section 382(f). Table 4 contains the ap-
propriate percentages for determining the
low-income housing credit described in
section 42(b)(2) for buildings placed in
service during the current month. Finally,
Table 5 contains the federal rate for deter-
mining 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. 2000–19 TABLE 1
Applicable Federal Rates (AFR) for April 2000
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-Term
AFR6.46%6.36%6.31%6.28%
110% AFR7.12%7.00%6.94%6.90%
120% AFR7.78%7.63%7.56%7.51%
130% AFR8.44%8.27%8.19%8.13%
Mid-Term
AFR6.71%6.60%6.55%6.51%
110% AFR7.39%7.26%7.20%7.15%
120% AFR8.08%7.92%7.84%7.79%
130% AFR8.76%8.58%8.49%8.43%
150% AFR10.15%9.90%9.78%9.70%
175% AFR11.88%11.55%11.39%11.28%
Long-Term
AFR6.49%6.39%6.34%6.31%
110% AFR7.15%7.03%6.97%6.93%
120% AFR7.82%7.67%7.60%7.55%
130% AFR8.48%8.31%8.23%8.17%
REV. RUL. 2000–19 TABLE 2
Adjusted AFR for April 2000
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
adjusted AFR4.39%4.34%4.32%4.30%
Mid-term
adjusted AFR5.00%4.94%4.91%4.89%
Long-term
adjusted AFR5.75%5.67%5.63%5.60%

April 3, 20008502000–14 I.R.B.
REV. RUL. 2000–19 TABLE 3
Rates Under Section 382 for April 2000
Adjusted federal long-term rate for the current month5.75%
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.)5.84%
REV. RUL. 2000–19 TABLE 4
Appropriate Percentages Under Section 42(b)(2)
for April 2000
Appropriate percentage for the 70% present
value low-income housing credit8.55%
Appropriate percentage for the 30% present
value low-income housing credit3.66%
REV. RUL. 2000–19 TABLE 5
Rate Under Section 7520 for April 2000
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 interest8.0%
Section 1288.—Treatment of
Original Issue Discounts on Tax-
Exempt Obligations
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2000. See Rev. Rul. 2000–19, page 849.
Section 7520.—Valuation Tables
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2000. See Rev. Rul. 2000–19, page 849.
Section 7872.—Treatment of
Loans With Below-Market
Interest Rates
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of April 2000. See Rev. Rul. 2000–19, page 849.

2000–14 I.R.B.851April 3, 2000
Request for Comments on the
Revision of Proposed Section
987 Regulations
Notice 2000–20
Treasury and the IRS plan to review
and possibly replace the proposed regula-
tions issued under section 987 of the In-
ternal Revenue Code of 1986. The cur-
rent proposed regulations provide rules
for determining the timing, source, char-
acter, and amount of foreign currency
gain or loss recognized with respect to a
qualified business unit (QBU) with a
functional currency different from that of
the taxpayer (i.e., different from that of
the taxpayer’s home office) if the QBU
does not use the dollar approximate sepa-
rate transactions method of accounting.
Treasury and the IRS are concerned that
the proposed regulations may not have
fully achieved their original goal of pro-
viding rules that are administrable and re-
sult in the recognition of foreign currency
gains and losses under the appropriate cir-
cumstances. Accordingly, Treasury and
the IRS request comments concerning is-
sues that should be addressed in revised
regulations under section 987.
Further, Treasury and the IRS are con-
cerned about certain abusive transactions
designed to create an inappropriate accel-
eration of foreign currency losses under
section 987. These abusive transactions
may involve a circular flow of funds be-
tween a foreign QBU and its U.S. parent.
Treasury and the IRS intend to challenge
these transactions under general tax prin-
ciples and to issue regulations to prevent
these abuses.
I. BACKGROUND
Treasury and the IRS published pro-
posed regulations under section 987 on
September 25, 1991. The proposed regu-
lations provide rules for determining the
timing, source, character, and amount of
foreign currency gain or loss recognized
with respect to a QBU branch (as defined
in Prop. Treas. Reg. §1.987–1(a)(2)) that
has a functional currency different from
that of the taxpayer. The proposed regula-
tions adopt the profit and loss method of
computing foreign currency gain or loss
for purposes of section 987. Prop. Treas.
Reg. § 1.987–1(b)(1).
Prop. Treas. Reg. §1.987–2(a)(1) pro-
vides that a taxpayer applying this profit
or loss method recognizes gain or loss
under section 987 upon a remittance (as
defined in Prop. Treas. Reg.
§1.987–2(b)(4)) from the QBU branch or
upon the QBU branch’s termination.
Prop. Treas. Reg. §1.987–2(a)(2) provides
an anti-abuse rule with respect to contri-
butions to (or distributions from) a QBU
branch that do not have a significant busi-
ness purpose.
Prop. Treas. Reg. §1.987–2(b)(4) pro-
vides that the term “remittance” means
the amount of any transfer (as defined
below) from a QBU branch to the tax-
payer to the extent that the aggregate
amount of such transfers during the tax-
able year does not exceed the positive
year-end balance of the equity pool as de-
termined in Prop. Treas. Reg.
§1.987–2(c)(1) (without regard to the de-
creases described in Prop. Treas. Reg.
§1.987–2(c)(1)(iii)(B)). Prop. Treas. Reg.
§1.987–2(b)(2) provides, in part, that the
term “transfer” means the amount of
property that, on any day, either is distrib-
uted from a QBU branch to the taxpayer
(or to another QBU branch of the tax-
payer) or is contributed by the taxpayer
(or another QBU branch of the taxpayer)
to the QBU branch. If contributions to
the QBU branch from the taxpayer occur
on the same day as distributions from the
QBU branch to the taxpayer, these contri-
butions and distributions are netted
against one another, and only the net
amount is treated as a transfer to (or from)
the QBU branch. This rule is generally
referred to as the “daily netting rule.”
Section 987 gain or loss equals the dif-
ference between a remittance, translated
into the taxpayer’s functional currency
using the spot rate at the date of the remit-
tance, and the portion of the basis pool,
determined under Prop. Treas. Reg.
§1.987–2(c)(2), attributable to the remit-
tance. Prop. Treas. Reg. § 1.987–2(d)(1).
II. REQUEST FOR COMMENTS ON
THE PROPOSED SECTION 987
REGULATIONS
As noted above, Treasury and the IRS
are currently reviewing the proposed sec-
tion 987 regulations to determine if such
regulations are administrable and provide
rules that call for the appropriate recogni-
tion of foreign currency gain or loss. Ac-
cordingly, Treasury and the IRS request
comments on the application of section
987 generally and on the interaction of
section 987 with other provisions of the
Code, particularly with respect to the is-
sues outlined below. With respect to any
comments submitted under this notice,
Treasury and the IRS request explana-
tions of the extent to which the taxpayer’s
comments would differ depending on the
type of QBU at issue, e.g., a QBU that
constitutes a branch, partnership, or trust.
A. Treatment of Contributions and Dis-
tributions of Capital to or from a QBU
Branch Under Section 987
Treasury and the IRS are reevaluating
the treatment under section 987 of contri-
butions of capital to, and distributions of
capital from, a QBU branch. Under the
proposed section 987 regulations, the eq-
uity pool includes contributions of prop-
erty to a QBU branch. Further, distribu-
tions of property from the QBU branch
are treated as transfers that may constitute
remittances and thus may trigger currency
gain or loss, even if the property consists
of tangible property previously con-
tributed to the QBU branch (or acquired
with funds previously contributed to the
QBU branch), whose value is not affected
by exchange rate fluctuations.
An approach different from the pro-
posed regulations might compute cur-
rency gain and loss only on remittances of
earnings, rather than taking remittances of
capital into account. In most cases, this
approach would align section 987 princi-
ples more closely with the principles of
section 986(c). Treasury and the IRS re-
quest comments regarding the adoption of
such an approach in the section 987 regu-
lations, including comments on the use of
a stacking or other rule to determine the
extent to which remittances are attribut-
able to earnings. Treasury and the IRS
are also considering whether it might be
appropriate to maintain a historic dollar
basis in certain tangible assets for pur-
poses of adjusting the equity and basis
pools in lieu of calculating exchange gain
or loss. Treasury and the IRS also request
Part III. Administrative, Procedural, and Miscellaneous

comments regarding whether special rules
should apply to assets the value of which
is significantly affected by exchange rate
fluctuations or to taxpayers who hold sig-
nificant amounts of such assets in the or-
dinary course of their trade or business.
B. Definitions of Transfer and Remit-
tance
1. Use of an Annual Netting Conven-
tion
Treasury and the IRS are considering
providing detailed guidance on the defini-
tion of the term “transfer.” For example,
Treasury and the IRS are considering an
annual netting rule to determine the exis-
tence and amount of a transfer. Under
this rule, a transfer to or from any QBU
branch would consist of the net amount of
property that, in any taxable year of the
taxpayer, either is distributed from the
QBU branch to the taxpayer (or to any
other QBU branch of the same taxpayer)
or is contributed by the taxpayer (or by
any other QBU branch of the taxpayer) to
the QBU branch. In comparison with the
proposed regulations, this approach
would be closer to the approach used in
section 884 to determine the “dividend
equivalent amount” of a U.S. branch of a
foreign corporation. Treasury and the
IRS expect that an annual netting rule
would benefit taxpayers by decreasing the
administrative burden associated with cal-
culating the amount of a transfer. If an
annual netting rule were adopted, the reg-
ulations might also provide that, for pur-
poses of determining the existence or
amount of any transfer, the IRS could dis-
regard any distribution or contribution in
appropriate circumstances to the extent
that such conveyance is offset by either a
distribution or a contribution (whether or
not to or from the same QBU branch that
was a party to the original distribution or
contribution) made within 30 days (or
other designated period) of the last day of
the taxpayer’s taxable year.
As discussed in Part III, Treasury and
the IRS are concerned that the daily net-
ting rule in the definition of “transfer” in
Prop. Treas. Reg. § 1.987–2(b)(2) is sus-
ceptible to manipulation by taxpayers and
question whether it should be retained.
Accordingly, Treasury and the IRS re-
quest comments regarding whether the
daily netting rule yields a sufficiently ac-
curate measurement of transfers during
the taxable year, whether such a rule is
conceptually consistent with the regime
applied to controlled foreign corporations
under section 986, whether the rule is ad-
ministratively burdensome for taxpayers,
and whether the rule can be retained with-
out giving rise to abuse.
2. Transfers Between QBU Branches
Under the proposed section 987 regula-
tions, a property conveyance between two
QBU branches of the taxpayer receives
the same treatment as a property con-
veyance from a QBU branch to its home
office. Comments are requested regard-
ing whether it is appropriate to treat a
property transfer between such QBU
branches as a transfer from the distribut-
ing QBU branch to the home office, fol-
lowed by a contribution of the same prop-
erty from the home office to the recipient
QBU branch. These comments should
consider whether different results would
be appropriate depending on the type of
transaction, on whether the QBU
branches share the same functional cur-
rency, or otherwise.
C. Types of Property Whose Distribu-
tion Can Constitute a Transfer
Under the proposed section 987 regula-
tions, the term “transfer” includes the net
amount of any property distributed by a
QBU branch. Treasury and the IRS seek
comments with respect to whether distrib-
utions of certain classes of property (e
.g.,
inventory or other property normally
transferred between the home office and
the QBU branch in the ordinary course of
business) should be distinguished from
distributions of property more in the na-
ture of a repatriation of earnings or capital
and, if so, how such a distinction might be
applied to prevent manipulation of section
987.
D. Interaction Between Section 987
Regulations and the Partnership Rules
Because a partnership is a QBU of each
partner (under Treas. Reg. §
1.989(a)–1(b)(2)(i)), the notice of pro-
posed rulemaking requested comments on
the manner in which section 987 could be
better coordinated with Subchapter K.
Only one comment was received in re-
sponse to this request. Due to the imple-
mentation of the “check-the-box” rules
under Treas. Reg. §301.7701–3, Treasury
and the IRS expect increased taxpayer use
of partnerships and disregarded entities,
leading to increased interest in the inter-
action of the partnership and section 987
regimes. In addition to general comments
on the interaction of section 987 and Sub-
chapter K, Treasury and the IRS invite
comments on the interaction of section
987 with the rules relating to actual and
deemed partnership distributions and
transfers of interests in partnerships. For
example, as noted in the notice of pro-
posed rulemaking, it is anticipated that
section 987 will operate independently
from the general rules in Subchapter K.
Accordingly, although no gain or loss on
a partnership distribution may be recog-
nized under section 731, a partnership
distribution (remittance) may give rise to
currency gain or loss under section 987.
Additionally, the proposed regulations
under section 987 provide for the recogni-
tion of currency gain or loss on the termi-
nation of a QBU branch. However, the
proposed regulations reserve on the ap-
propriate treatment of a termination of a
QBU that is classified as a partnership.
See Prop. Treas. Reg. § 1.987–3(e).
Treasury and the IRS request comments
addressing whether section 987 gain or
loss should be triggered by reason of a
partnership termination under section
708(b), including terminations under
Treas. Reg. § 1.708–1(b)(1)(ii) (relating
to termination due to the sale or exchange
of a fifty percent or greater interest in the
partnership). Moreover, Treasury and the
IRS are examining whether currency gain
or loss recognition under section 987 is
appropriate where a partner terminates its
interest in a partnership by reason of a
sale or exchange of its partnership interest
to a third party, rather than having its in-
terest redeemed by the partnership.
Finally, comments are requested re-
garding the approach the section 987 reg-
ulations should take with respect to tiered
partnerships and other tiered arrange-
ments.
E. Interaction with Financial Account-
ing Rules
Financial accounting rules addressing
the reporting of foreign currency gain or
loss with respect to branches under FAS
No. 52 differ materially from the statutory
rules enacted by Congress in section 987.
While these rules cannot be perfectly
aligned, Treasury and the IRS request
comments on whether, and the manner in
which, the regulations should be more
closely harmonized with financial ac-
counting principles, either for policy rea-
April 3, 20008522000–14 I.R.B.

sons or to reduce the administrative bur-
den of complying with the regulations.
F. Section 351 Transactions and Re-
lated Issues
The proposed regulations treat the
transfer of a QBU branch’s assets in a sec-
tion 351 transaction described in section
367(a) as a QBU branch termination. See
Prop. Treas. Reg. § 1.987–3(c)(1). The
regulations, however, reserve on provid-
ing guidance on other types of section 351
transactions. See Prop. Treas. Reg. §
1.987–3(c)(2). Treasury and the IRS re-
quest comments on examples of QBU
branch asset transfers in section 351
transactions that should not be treated as
QBU branch terminations. One such ex-
ample might include the transfer of a
QBU branch’s assets between domestic
members of a U.S. consolidated group.
Treasury and the IRS request comments
on the most appropriate method of deter-
mining section 987 gain and loss in the
context of nonrecognition transactions in-
volving other types of entities, such as
partnerships and trusts.
G. Other Issues
Treasury and the IRS also request com-
ments regarding other major issues that
should be addressed as the section 987
proposed regulations are reexamined.
III. ABUSIVE ARRANGEMENTS
A. Applicability of Current Legal Prin-
ciples
Treasury and the IRS have become
aware that some taxpayers argue that the
rule in the proposed section 987 regula-
tions requiring daily netting of contribu-
tions and distributions allows them to rec-
ognize foreign currency losses
prematurely with respect to purported
transfers that do not constitute actual eco-
nomic remittances (i.e., from transactions
that are undertaken for tax purposes and
lack meaningful non-tax economic conse-
quences). This opportunity is present
when the spot rate is less than the histori-
cal rate used to determine the amount of
capital and earnings in the basis pool. In
such a situation, taxpayers have attempted
to use circular cash flows consisting of a
transfer of property from the QBU branch
to the taxpayer on one day followed
closely by a transfer of property from the
taxpayer to the QBU branch on another
day to recognize foreign currency losses
without economically affecting the net
asset position of the QBU branch.
Treasury and the IRS believe that cir-
cular cash flows and similar transactions
lacking economic substance will not re-
sult in recognition of foreign currency
losses under general tax principles be-
cause such transactions are not properly
treated as transfers or remittances under
section 987. See, e.g., ACM Partnership
v. Commissioner, 157 F.3d 231 (3d Cir.
1998), cert. denied, 526 U.S. 1017 (1999)
(denying tax benefits from a transaction
lacking economic substance); Rev. Rul.
99–14, 1999–13 I.R.B. 3 (denying tax de-
ductions from a transaction lacking eco-
nomic substance, citing, among other fac-
tors, the use of a circular flow of funds);
Erhard v. Commissioner, 46 F.3d 1470
(9
th
Cir. 1995), aff ’gT.C. Memo
1993–25, cert. denied, 516 U.S. 930
(1995) (denying tax benefits with respect
to circular cash flow). See alsoRev. Rul.
83–142, 1983–2 C.B. 68 (ignoring a cir-
cular flow of funds in determining the
characterization of a transaction).
The following examples illustrate cases
in which the IRS may challenge foreign
currency losses under general tax princi-
ples. For purposes of these examples, as-
sume P is a domestic corporation (with
the dollar as its functional currency) that
has QBU branch 1 in country X and QBU
branch 2 in country Y. QBU branch 1
uses the u as its functional currency.
Example 1
On January 1 of year 5, P contributes 100u to
QBU branch 1. On January 2 of year 5, QBU
branch 1 distributes 50u to P. On January 4 of year
5, QBU branch 1 distributes another 50u to P. As-
sume the spot rate on these three days is less than the
historical rate used to determine the amount of capi-
tal and earnings in the basis pool of QBU branch 1,
so that a remittance would potentially result in
recognition of a foreign currency loss. Further as-
sume that the total of all transfers during the taxable
year does not exceed the positive year end balance
of the equity pool. Because the distributions by
QBU branch 1 are offset by a contribution from P
that occurred in close temporal proximity, the IRS
will scrutinize this type of transaction and may dis-
regard the contribution and distributions for pur-
poses of section 987.
Example 2
On January 1 of year 5, QBU branch 1 distributes
100u to P. On January 4 of year 5, P contributes
100u to QBU branch 2. QBU branch 2 uses the ac-
count to which the 100u was deposited to pay the
operating expenses and other costs of QBU branch
1. Assume the spot rate on January 1 of year 5 is
less than the historical rate used to determine the
amount of capital and earnings in the basis pool of
QBU branch 1, so that a remittance would poten-
tially result in recognition of a foreign currency loss.
Further assume that the total of all transfers from
QBU branch 1 during the taxable year does not ex-
ceed the positive year end balance of the equity pool
for QBU branch 1. Because QBU branch 1 contin-
ues to have use of the distributed property, the IRS
will scrutinize this type of transaction and may dis-
regard the 100u conveyance from QBU branch 1 to
P for purposes of section 987.
B. Regulations to be Issued pursuant to
this Notice
1. Clarification of Transfer and Remit-
tance Definitions
Treasury and the IRS plan to issue reg-
ulations which will alter the definition of
the terms “transfer” and “remittance” to
clarify that transactions lacking economic
substance will not be respected for pur-
poses of recognizing currency losses on
transfers between a QBU branch and its
home office or between QBU branches of
a single taxpayer (or related taxpayers).
Circular cash flows, or any property dis-
tribution from a QBU branch followed or
preceded (within a relatively short time
period) by a contribution to that QBU
branch or a distribution from a second
QBU branch of the same taxpayer to that
QBU branch, may not be treated as a
transfer to the extent of the offsetting
amount.
In addition, a contribution or distribu-
tion of property may be disregarded (i.e.,
not treated as a transfer) if the unit mak-
ing the contribution or distribution does
not lose the use of the property for a sig-
nificant period. For example, a distribu-
tion from a QBU branch to a bank ac-
count to which the QBU branch has
access may be disregarded if the QBU
branch retains the use or control of the
property.
2. Change in Anti-Abuse Rule
Treasury and the IRS plan to modify
the anti-abuse rule of Prop. Treas. Reg.
§1.987–2(a)(2) to provide that if a contri-
bution to or a distribution from (or a se-
ries of contributions to or distributions
from) a QBU branch, or a termination of a
QBU branch, lacks economic substance
or is otherwise inconsistent with the pur-
poses of section 987, then the Commis-
sioner may make appropriate adjustments
to properly reflect the economic effects of
the transaction or any related or concur-
rent transaction.
Under the regulations to be issued
under this notice, the above-described
change to the anti-abuse rule will apply to
contributions, distributions, and termina-
tions occurring on or after March 21,
2000–14 I.R.B.853April 3, 2000

2000. Notwithstanding the above-de-
scribed change to the anti-abuse rule, eco-
nomic substance case law continues to
apply to periods before (as well as after)
the date this change takes effect.
VI. SUBMISSION OF COMMENTS
Written comments may be submitted to
the Associate Chief Counsel (International),
Attention: Rebecca Rosenberg (Notice
2000–20), Room 4562, CC:Intl:Br5, Internal
Revenue Service, 1111 Constitution Avenue
NW, Washington DC 20224. Alternatively,
taxpayers may submit comments directly to
the IRS Internet site at http://www.irs.
ustreas.gov/prod/tax_regs/comments.htm
l. Comments will be available for public in-
spection and copying. Treasury and the IRS
request comments by June 19, 2000.
For further information regarding this
notice, contact Rebecca Rosenberg of the
Office of the Associate Chief Counsel (In-
ternational) at 202-622-3870 (not a toll-
free call).
April 3, 20008542000–14 I.R.B.

Treatment of Distributions to
Foreign Persons Under Sections
367(e)(1) and 367(e)(2);
Correction
Announcement 2000–24
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction to final regulations.
SUMMARY: This document contains
corrections to T.D. 8834 (1999–34 I.R.B.
251), which were published in the Fed-
eral Registeron Monday, August 9, 1999
(64 F.R. 43072), relating to the treatment
of distributions to foreign persons under
section 367(e)(1) and (2) as added to the
Internal Revenue Code by the Tax Re-
form Act of 1986, which affects U.S. cor-
porations.
DATES: This correction is effective Au-
gust 9, 1999.
FOR FURTHER INFORMATION CON-
TACT: Guy A. Bracuti, 202-622-3860
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are subject to
these corrections are under section
367(e)(1) and (2) of the Internal Revenue
Code.
Need for Correction
As published, final regulations (TD
8834) contain errors that may prove to be
misleading and are in need of clarifica-
tion.
Correction of Publication
Accordingly, the publication of the
final regulations (TD 8834), which was
the subject of FR Doc. 99–20092, is cor-
rected as follows:
§1.367(e)–1 [Corrected]
1. On page 43076, column 2 ,
§1.367(e)–1(b)(2), lines 19, 20 and 21
from the bottom of the column, the lan-
guage “entity (disregarded entity) under
§1.7701–3(b)(1)(ii) or (b)(2)(i)(C) are” is
corrected to read “entity separate from its
owner (disregarded entity) under
§301.7701–3 of this chapter are”.
2. On page 43076, column 3,
§1.367(e)–1(d)(1), lines 2 and 3 from the
bottom of the column, the language “de-
scribed in paragraph (b)(1) of this section
are” is corrected to read “described in sec-
tion 355 in which the distributing corpo-
ration is domestic and the controlled cor-
poration is foreign are”.
§1.367(e)–2 [Corrected]
3. On page 43078, column 1,
§1.367(e)–2(b)(1)(ii)(B)(2), lines 7, 8 and
9 from the bottom of the Example, the
language “allocate $45 (60 X .75) of the
recognized capital loss to Asset B and will
allocate the remaining $15 (60 X .25) of”
is corrected to read “allocate $15 (60 X
.25) of the recognized capital loss to Asset
B and will allocate the remaining $45 (60
X .75) of”.
4. On page 43078, column 1,
§1.367(e)–2(b)(1)(ii)(C), lines 16 and 17,
the language “shall not offset loss” is cor-
rected to read “shall not be offset by a
loss”.
5. On page 43081, column 1,
§1.367(e)–2(b)(2)(iii)(A)(2), line 2, the
language “(directly)” is corrected to read
“(directly and without regard to paragraph
(b)(1)(iii) of this section)”.
6. On page 43081, column 1,
§1.367(e)–2(b)(2)(iii)(A)(3), line 2, the
language “(directly)” is corrected to read
“ (directly and without regard to para-
graph (b)(1)(iii) of this section)”.
7. On page 43081, column 1,
§1.367(e)–2(b)(2)(iii)(B), lines 7 through
11, the language “(or was a U.S. real
property holding corporation with respect
to the foreign distributee corporation dur-
ing the five year period ending on the date
of liquidation)” is corrected to read “(or is
a former U.S. real property holding cor-
poration the stock of which is treated as a
U.S. real property interest for five years
under section 897(c)(1)(A)(ii))”.
8. On page 43081, column 1,
§1.367(e)–2(b)(2)(iii)(C)(2), line 8 from
the bottom of the paragraph, the language
“disposes of” is corrected to read “dis-
poses of (whether in a recognition or non-
recognition transaction)”.
9. On page 43081, column 1,
§1.367(e)–2(b)(2)(iii)(C)(2), the last three
lines of the paragraph, the language “that
a principal purpose of the liquidation was
not the avoidance of U.S. tax” is corrected
to read “that the avoidance of U.S. tax
was not a principal purpose of the liquida-
tion”.
10. On page 43081, column 2,
§1.367(e)–2(b)(2)(iii)(D), line 10 from
the bottom of the paragraph, the language
“to such stock” is corrected to read “to the
distributed stock”.
11 On page 43081, column 2,
§1.367(e)–2(b)(3)(i), the last sentence of
the paragraph is removed.
12. On page 43081, column 3,
§1.367(e)–2(c)(2)(i)(A), line 7, the lan-
guage “gain on the” is corrected to read
“gain (or loss in accordance with princi-
ples contained in paragraph (b)(1)(ii) of
this section) on the”.
13. On page 43082, column 2,
§1.367(e)–2(c)(3)(i), the last sentence of
the paragraph is removed.
14. On page 43082, column 2,
§1.367(e)–2(e), lines 2 and 3, the lan-
guage “occurring 30 days after August 9,
1999 or” is corrected to read “occurring
on or after September 7, 1999 or”.
Dale D. Goode,
Federal Register Liaison,
Assistant Chief Counsel (Corporate).
Use of Actuarial Tables in
Valuing Annuities, Interests for
Life or Term of Years, and
Remainder or Reversionary
Interests; Correction
Announcement 2000–25
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Correction of final and tempo-
rary regulations.
SUMMARY: This document contains
corrections to T.D. 8819 (1999–20 I.R.B.
5) which were published in the Federal
Registeron Friday, April 30, 1999 (64
F.R. 23187), relating to the use of actuar-
ial tables in valuing annuities, interests
2000–14 I.R.B.855April 3, 2000
Part IV. Items of General Interest

April 3, 20008562000–14 I.R.B.
for life or terms of years, and remainder
or reversionary interests.
DATES: This correction is effective May
1, 1999.
FOR FURTHER INFORMATION CON-
TACT: William L. Blodgett at (202)
622-3090 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are subject of
these corrections are under section 7520
of the Internal Revenue Code.
Need for Correction
As published, the final regulations (TD
8819) contain an error that may prove to
be misleading and is in need of clarifica-
tion.
Correction of Publication
Accordingly, the publication of the
final regulations (TD 8819), which were
the subject of FR Doc. 99–10533, is cor-
rected as follows:
§1.664–2 [Corrected]
1. On page 23229, in the table in
amendatory instruction Par. 32, the entry
for 1.664–2(c) is corrected to read as fol-
lows:
Dale D. Goode,
Federal Register Liaison,
Assistant Chief Counsel (Corporate).
SectionRemoveAdd
* * * * *
1.664–2(c), sixth sentenceApril 30, 1989April 30, 1999
* * * * *

2000–14 I.R.B.iApril 3, 2000
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:
Amplified describes 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
applied to A, and the new ruling holds
that the same principle also applies to B,
the earlier ruling is amplified. (Compare
with modified, below).
Clarified is 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
published ruling and points out an essen-
tial difference between them.
Modified is 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 ap-
plies to both A and B, the prior ruling is
modified because it corrects a published
position. (Compare with amplified and
clarified, above).
Obsoleted describes 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
rulings that are obsoleted because of
changes in law or regulations. A ruling
may also be obsoleted because the sub-
stance has been included in regulations
subsequently adopted.
Revoked describes situations where the
position in the previously published rul-
ing is not correct and the correct position
is being stated in the new ruling.
Superseded describes 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
substance of a prior ruling, a combination
of terms is used. For example, modified
and superseded describes a situation
where the substance of a previously pub-
lished 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 super-
seded.
Supplemented is 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 pub-
lished that includes the list in the original
ruling and the additions, and supersedes
all prior rulings in the series.
Suspended is 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 for-
merly used will appear in material 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 Contribution 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.—Statements of Procedral 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.
Definition of Terms

April 3, 2000ii2000–14 I.R.B.
Numerical Finding List
1
Bulletins 2000–1 through 2000–13
Announcements:
2000–1, 2000–2 I.R.B. 294
2000–2, 2000–2 I.R.B. 295
2000–3, 2000–2 I.R.B. 296
2000–4, 2000–3 I.R.B. 317
2000–5, 2000–4 I.R.B. 427
2000–6, 2000–4 I.R.B. 428
2000–7, 2000–6 I.R.B. 586
2000–8, 2000–6 I.R.B. 586
2000–9, 2000–9 I.R.B. 733
2000–10, 2000–9 I.R.B. 733
2000–11, 2000–10 I.R.B. 739
2000–12, 2000–12 I.R.B. 835
2000–13, 2000–11 I.R.B. 771
2000–14, 2000–11 I.R.B. 772
2000–15, 2000–12 I.R.B. 837
2000–16, 2000–12 I.R.B. 837
2000–17, 2000–13 I.R.B. 846
2000–18, 2000–13 I.R.B. 846
Notices:
2000–1, 2000–2 I.R.B. 288
2000–2, 2000–9 I.R.B. 727
2000–3, 2000–4 I.R.B. 413
2000–4, 2000–3 I.R.B. 313
2000–5, 2000–3 I.R.B. 314
2000–6, 2000–3 I.R.B. 315
2000–7, 2000–4 I.R.B. 419
2000–8, 2000–4 I.R.B. 420
2000–9, 2000–5 I.R.B. 449
2000–10, 2000–5 I.R.B. 451
2000–11, 2000–6 I.R.B. 572
2000–12, 2000–9 I.R.B. 727
2000–13, 2000–9 I.R.B. 732
2000–14, 2000–10 I.R.B. 737
2000–15, 2000–12 I.R.B. 826
2000–16, 2000–12 I.R.B. 826
2000–17, 2000–12 I.R.B. 827
2000–18, 2000–13 I.R.B. 845
2000–19, 2000–13 I.R.B. 845
Proposed Regulations:
REG–208280–86, 2000–8 I.R.B. 654
REG–209135–88, 2000–8 I.R.B. 681
REG–208254–90, 2000–6 I.R.B. 577
REG–209601–92, 2000–12 I.R.B. 829
REG–100276–97, 2000–8 I.R.B. 682
REG–101492–98, 2000–3 I.R.B. 326
REG–106012–98, 2000–2 I.R.B. 290
REG–110311–98, 2000–11 I.R.B. 767
REG–103831–99, 2000–5 I.R.B. 452
REG–103882–99, 2000–8 I.R.B. 706
REG–105089–99, 2000–6 I.R.B. 580
REG–105279–99, 2000–8 I.R.B. 707
REG–105606–99, 2000–4 I.R.B. 421
REG–111119–99, 2000–5 I.R.B. 455
REG–113572–99, 2000–7 I.R.B. 624
REG–116048–99, 2000–6 I.R.B. 584
REG–116567–99, 2000–5 I.R.B. 463
REG–116704–99, 2000–3 I.R.B. 325
REG–100163–00, 2000–7 I.R.B. 633
REG–103735–00, 2000–11 I.R.B. 770
Proposed Regulations—continued:
REG–103736–00, 2000–11 I.R.B. 768
Railroad Retirement Quarterly Rate:
2000–9 I.R.B. 721
Revenue Procedures:
2000–1, 2000–1 I.R.B. 4
2000–2, 2000–1 I.R.B. 73
2000–3, 2000–1 I.R.B. 103
2000–4, 2000–1 I.R.B. 115
2000–5, 2000–1 I.R.B. 158
2000–6, 2000–1 I.R.B. 187
2000–7, 2000–1 I.R.B. 227
2000–8, 2000–1 I.R.B. 230
2000–9, 2000–2 I.R.B. 280
2000–10, 2000–2 I.R.B. 287
2000–11, 2000–3 I.R.B. 309
2000–12, 2000–4 I.R.B. 387
2000–13, 2000–6 I.R.B. 515
2000–15, 2000–5 I.R.B. 447
2000–16, 2000–6 I.R.B. 518
2000–17, 2000–11 I.R.B. 766
2000–18, 2000–9 I.R.B. 722
2000–19, 2000–12 I.R.B. 785
2000–20, 2000–6 I.R.B. 553
Revenue Rulings:
2000–1, 2000–2 I.R.B. 250
2000–2, 2000–3 I.R.B. 305
2000–3, 2000–3 I.R.B. 297
2000–4, 2000–4 I.R.B. 331
2000–5, 2000–5 I.R.B. 436
2000–6, 2000–6 I.R.B. 512
2000–7, 2000–9 I.R.B. 712
2000–8, 2000–7 I.R.B. 617
2000–9, 2000–6 I.R.B. 497
2000–10, 2000–8 I.R.B. 643
2000–11, 2000–10 I.R.B. 734
2000–12, 2000–11 I.R.B. 744
2000–13, 2000–12 I.R.B. 774
2000–14, 2000–12 I.R.B. 779
2000–15, 2000–12 I.R.B. 774
2000–16, 2000–12 I.R.B. 780
2000–17, 2000–13 I.R.B. 842
Treasury Decisions:
8849, 2000–2 I.R.B. 245
8850, 2000–2 I.R.B. 265
8851, 2000–2 I.R.B. 275
8852, 2000–2 I.R.B.253
8853, 2000–4 I.R.B.377
8854, 2000–3 I.R.B.306
8855, 2000–4 I.R.B.374
8856, 2000–3 I.R.B.298
8857, 2000–4 I.R.B.365
8858, 2000–4 I.R.B.332
8859, 2000–5 I.R.B.429
8860, 2000–5 I.R.B.437
8861, 2000–5 I.R.B.441
8862, 2000–6 I.R.B.466
8863, 2000–6 I.R.B.488
8864, 2000–7 I.R.B.614
8865, 2000–7 I.R.B.589
8866, 2000–6 I.R.B.495
8867, 2000–7 I.R.B.620
Treasury Decisions—continued:
8868, 2000–6 I.R.B.491
8869, 2000–6 I.R.B.498
8870, 2000–8 I.R.B.647
8871, 2000–8 I.R.B.641
8872, 2000–8 I.R.B.639
8873, 2000–9 I.R.B.713
8874, 2000–8 I.R.B.644
8875, 2000–11 I.R.B.761
8876, 2000–11 I.R.B.753
8877, 2000–11 I.R.B.747
1
A cumulative list of all revenue rulings, revenue
procedures, Treasury decisions, etc., published in
Internal Revenue Bulletins 1999–27 through
1999–52 is in Internal Revenue Bulletin 2000–1,
dated January 3, 2000.

2000–14 I.R.B.iiiApril 3, 2000
Finding List of Current Actions on
Previously Published Items
1
Bulletins 2000–1 through 2000–13
Announcements:
99–50
Modified by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
Notices:
88–125
Obsoleted by
T.D. 8870, 2000–8 I.R.B. 647
92–48
Obsoleted by
Notice 2000–11, 2000–6 I.R.B. 572
97–19
Modified by
Rev. Proc. 2000–1, 2000–1 I.R.B. 4
98–22
Obsoleted by
T.D. 8870, 2000–8 I.R.B. 647
98–52
Modified by
Notice 2000–3, 2000–4 I.R.B. 413
98–61
Modified and superseded by
Rev. Proc. 2000–15, 2000–5 I.R.B. 447
99–8
Obsoleted by
Rev. Proc. 2000–12, 2000–4 I.R.B. 387
2000–4
Corrected by
Announcement 2000–9, 2000–9 I.R.B. 733
Proposed Regulations:
REG–101492–98
Corrected by
Announcement 2000–16, 2000–12 I.R.B. 837
Revenue Procedures:
80–18
Modified by
Rev. Proc. 2000–13, 2000–6 I.R.B. 515
89–9
Superseded by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
89–13
Superseded by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
90–21
Superseded by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
91–66
Superseded by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
92–13
Modified, amplified, and superseded by
Rev. Proc. 2000–11, 2000–3 I.R.B. 309
Revenue Procedures—Continued:
92–13A
Modified, amplified, and superseded by
Rev. Proc. 2000–11, 2000–3 I.R.B. 309
92–41
Superseded by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
93–9
Superseded by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
93–10
Superseded by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
94–12
Modified, amplified, and superseded by
Rev. Proc. 2000–11, 2000–3 I.R.B. 309
95–42
Superseded by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
96–13
Modified by
Rev. Proc. 2000–1, 2000–1 I.R.B. 4
98–22
Modified and superseded by
Rev. Proc. 2000–16, 2000–6 I.R.B. 518
98–27
Superseded by
Rev. Proc. 2000–12, 2000–4 I.R.B. 387
98–64
Superseded by
Rev. Proc. 2000–9, 2000–2 I.R.B. 280
98–65
Superseded by
Rev. Proc. 2000–19, 2000–12 I.R.B. 785
99–1
Superseded by
Rev. Proc. 2000–1, 2000–1 I.R.B. 4
99–2
Superseded by
Rev. Proc. 2000–2, 2000–1 I.R.B. 73
99–3
Superseded by
Rev. Proc. 2000–3, 2000–1 I.R.B. 103
99–4
Superseded by
Rev. Proc. 2000–4, 2000–1 I.R.B. 115
99–5
Superseded by
Rev. Proc. 2000–5, 2000–1 I.R.B. 158
99–6
Superseded by
Rev. Proc. 2000–6, 2000–1 I.R.B. 187
99–7
Superseded by
Rev. Proc. 2000–7, 2000–1 I.R.B. 227
99–8
Superseded by
Rev. Proc. 2000–8, 2000–1 I.R.B. 230
Revenue Procedures—Continued:
99–13
Modified and superseded by
Rev. Proc. 2000–16, 2000–6 I.R.B. 518
99–31
Modified and superseded by
Rev. Proc. 2000–16, 2000–6 I.R.B. 518
99–49
Modified and amplified by
Rev. Rul. 2000–4, 2000–4 I.R.B. 331
Rev. Rul. 2000–7, 2000–9 I.R.B. 712
Notice 2000–4, 2000–3 I.R.B. 313
99–51
Superseded by
Rev. Proc. 2000–3, 2000–1 I.R.B. 103
2000–6
Modified by
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
2000–8
Modified by
Rev. Proc. 2000–16, 2000–6 I.R.B. 518
Rev. Proc. 2000–20, 2000–6 I.R.B. 553
2000–16
Corrected by
Announcement 2000–17, 2000–13 I.R.B. 846
Revenue Rulings:
88–36
Modified by
Rev. Rul. 2000–6, 2000–6 I.R.B. 512
89–89
Obsoleted by
Rev. Rul. 2000–2, 2000–3 I.R.B. 305
92–19
Supplemented by
Rev. Rul. 2000–17, 2000–13 I.R.B. 842
98–30
Amplified and superseded by
Rev. Rul. 2000–8, 2000–7 I.R.B. 617
Treasury Decisions:
8734
Modified by
T.D. 8856, 2000–3 I.R.B. 298
8804
Modified by
T.D. 8856, 2000–3 I.R.B. 298
8845
Corrected by
Announcement 2000–6, 2000–4 I.R.B. 428
8846
Corrected by
Announcement 2000–3, 2000–2 I.R.B. 296
8847
Corrected by
Announcement 2000–13, 2000–11 I.R.B. 771
8852
Corrected by
Announcement 2000–18, 2000–13 I.R.B. 846
1
A cumulative list of current actions on previously
published items in Internal Revenue Bulletins
1999–27 through 1999–52 is in Internal Revenue
Bulletin 2000–1, dated January 3, 2000.

Index
Internal Revenue Bulletins
2000–1 Through 2000–13
The abbreviation and number in paren-
thesis following the index entry refer to
the specific item; numbers in roman and
italic type following the parenthesis refer
to the Internal Revenue Bulletin in which
the item may be found and the page
number on which it appears.
Key to Abbreviations:
AnnAnnouncement
CDCourt Decision
DODelegation Order
EOExecutive Order
PLPublic Law
PTEProhibited Transaction
Exemption
RPRevenue Procedure
RRRevenue Ruling
SPRStatement of Procedural
Rules
TCTax Convention
TDTreasury Decision
TDOTreasury Department Order
EMPLOYEE PLANS
Areas in which advance letter rulings and
determination letters will not be issued
from Associate Chief Counsel,
Domestic (RP 3) 1, 103
Areas in which advance letter rulings and
determination letters will not be issued
from Associate Chief Counsel,
International (RP 7) 1, 227
Cash or deferred arrangements:
Elective deferrals (RR 8) 7, 617
Nondiscrimination (Notice 3) 4, 413
Determination letters, issuing procedures
(RP 6) 1, 187
Eligible rollover distributions, safe har-
bor explanations (Notice 11) 6, 572
EPCRS, closing agreements (RP 16) 6,518;
correction (Ann 17) 13,846
Full funding limitations, weighted aver-
age interest rate for:
January (Notice 8) 4, 420
February (Notice 2) 9,727
March (Notice 18) 13, 845
Letter rulings, determination letters and
information letters issued by Associate
Chief Counsel (RP 1) 1, 4
Letter rulings, information letters, etc.
(RP 4) 1, 115
Master and prototype plans, unified pro-
cedures (RP 20) 6, 553
Minimum funding standards, waiver of
(RP 17) 11, 766
Mortality tables (Ann 7) 6, 586
New comparability plans, nondiscrimina-
tion (Notice 14) 10, 737
New technologies in retirement plans,
distribution notices and consents (TD
8873) 9, 713
Qualified retirement plans, remedial
amendment period (TD 8871) 8, 641
Regulations:
26 CFR 1.401(b)–1T, removed; reme-
dial amendment period (TD 8871)
8, 641
26 CFR 1.402(f)–1, amended;
1.411(a)–11, amended; new tech-
nologies in retirement plans (TD
8873) 9,713
Reporting requirements, section 457
plans (Ann 1) 2, 294
Technical advice to district directors and
chiefs, appeals offices, from Associate
Chief Counsel (RP 2) 1, 73
Technical advice to IRS employees (RP
5) 1, 158
User fees, request for letter rulings (RP
8) 1, 230
EMPLOYMENT TAX
Electronically filed information returns,
due dates (REG–105279–99) 8, 707
EPCRS, closing agreements (RP 16) 6,
518; correction (Ann 17) 13, 846
Information reporting:
Election workers (RR 6) 6,512
New technologies in retirement plans,
distribution notices and consents (TD
8873) 9, 713
Proposed Regulations:
26 CFR 31.3402(q)–1, revised;
31.6053–3, revised; 31.6071(a)–1,
revised; extension of due date for
electronically filed information
returns (REG–105279–99) 8, 707
Railroad retirement, quarterly rate
beginning January 1, 2000, 9, 721
Regulations:
26 CFR 35.3405–1, redesignated as
35.3405–1T, revised; 35.3405–1,
added; new technologies in retire-
ment plans (TD 8873) 9, 713
Marital / charitable deduction, valuation
of property; administration expenses
(Ann 3) 2, 296
QTIP elections, individual retirement
accounts and testamentary trusts (RR
2) 3, 305
EXCISE TAX
Minimum funding standards, waiver of
(RP 17) 11, 766
Prepaid telephone cards (TD 8855) 4,
374
Regulations:
26 CFR 49.4251–4, added; 602.101,
amended; prepaid telephone cards
(TD 8855) 4, 374
Return filing and deposits (Ann 5) 4, 427
EXEMPT
ORGANIZATIONS
Areas in which advance letter rulings and
determination letters will not be issued
from Associate Chief Counsel,
Domestic (RP 3) 1, 103
Information letters available for public
inspection (Ann 2) 2, 295
Letter rulings, information letters, etc.
(RP 4) 1, 115
List of organizations classified as private
foundations (Ann 8) 6, 586
Private foundation disclosure rules (TD
8861) 5, 441
Proposed Regulations:
26 CFR 1.170A–9(e)(6)( i ), amended;
1.509(a)–3(f)(1), amended;
1.512(a)–1(e), amended; 1.513–4,
withdrawn; 1.513–4, added; taxation
of tax-exempt organizations’ income
from corporate sponsorship
(REG–209601–92) 12, 829
Regulations:
26 CFR 1.513–7, added; travel and
tour activities of tax-exempt organi-
zations (TD 8874) 8, 644
26 CFR 301.6104(d)–1, removed;
301.6104(d)–2, redesignated as
301.6104(d)–0, revised;
301.6104(d)–3, redesignated as
301.6104(d)–1, amended;
301.6104(d)–4, redesignated as
301.6104(d)–2, amended;
301.6104(d)–5, redesignated as
April 3, 2000iv2000–14 I.R.B.
EMPLOYEE PLANS
cont.
ESTATE TAX

301.6104(d)–3, amended; private
foundation disclosure rules (TD
8861) 5, 441
Revocations (Ann 15) 12, 837
Sponsorship payments, taxation of
(REG–209601–92) 12, 829
Technical advice to district directors and
chiefs, appeals offices, from Associate
Chief Counsel (RP 2) 1, 73
Technical advice to IRS employees (RP
5) 1, 158
Travel tours, taxation of (TD 8874) 8,
644
User fees, request for letter rulings (RP
8) 1, 230
INCOME TAX
Accounting period change, automatic
consent (RP 11) 3, 309
Acquisitions, recognition of gain on dis-
tributions (Ann 10) 9, 733
Adequate disclosure of gifts (Ann 6) 4,
428
Allocation of partnership debt, nonre-
course liabilities (REG–103831–99) 5,
452
Amortization of intangible property (TD
8865) 7, 589
Appeals, test of arbitration procedure
(Ann 4) 3, 317
Areas in which advance letter rulings and
determination letters will not be issued
from Associate Chief Counsel,
International (RP 7) 1, 227
Asset acquisitions, allocation of purchase
price (TD 8858) 4, 332
Automobile owners and lessees (RP 18)
9, 722
Barter exchanges, information reporting
(Notice 6) 3, 315
Business Expenses:
ISO 9000 costs (RR 4) 4, 331
Substantiation (TD 8864) 7,614
Traveling expenses, per diem
allowances (RP 9) 2, 280
Canadian banking legislation, repeal,
deferral of termination (Notice 7) 4,
419
Closely-held real estate investment trust,
estimated tax payments, penalty relief
(Notice 5) 3, 314
Contribution in aid of construction, defi-
nition (REG–106012–98) 2, 290
Credits:
Low-income housing credit:
Compliance monitoring (TD 8859)
5, 429
Resident population estimates
(Notice 13) 9, 732
Puerto Rico and possession tax credit,
termination of (TD 8868) 6, 491
Research credit, controlled group
(REG–105606–99) 4, 421
Debt instrument (RR 12) 11, 744
Depletion, treatment of delay rental
(REG–103882–99) 8, 706
Depreciation:
MACRS property, involuntary conver-
sion or like-kind exchange (Notice
4) 3, 313; correction (Ann 9) 9, 733
Determination of underwriting income,
non-life insurance companies (TD
8857) 4, 365
Disclosure of return information, Census
of Agriculture (TD 8854) 3,306;
(REG–116704–99) 3, 325
Electronically filed information returns,
due dates of (REG–105279–99) 8, 707
Equity options with flexible terms, spe-
cial rules and definitions (TD 8866) 6,
495
Estimated taxes:
Closely-held real estate investment
trust, penalty relief (Notice 5) 3,
314
Filing requirements:
Northeastern taxpayers, due dates
(Notice 17) 12, 827
Financial asset securitization investment
trusts, general (REG–100276–97;
REG–122450–98) 8, 682
Foreign corporations:
Exclusion of shipping income
(REG–208280–86) 8, 654
Information reporting (TD 8850) 3,
265
Stock transfer rules:
General provisions (TD 8862) 6, 466
Nonrecognition (TD 8863) 6, 488;
(REG–116048–99) 6, 584
Foreign currency, hyperinflation; defini-
tion (REG–116567–99) 5, 463; (TD
8860) 5, 437
Foreign partnerships:
Information reporting (TD 8850) 3,
265
U.S. persons with reportable event,
reporting requirement (TD 8851) 2,
275
Form SS-4, interim waiver of signature
(Notice 19) 13, 845
Fringe benefits, aircraft valuation (RR
13) 12, 774
Guidance priority list (Notice 10) 5, 451
Information letters available for public
inspection (Ann 2) 2, 295
Information reporting:
Barter exchange (Notice 6) 3, 315
Foreign partnerships and foreign cor-
porations (TD 8850) 3, 265
Innocent spouse, equitable relief (RP 15)
5, 447
Installment agreements, limitation of fail-
ure to pay penalty (REG–105279–99)
8, 707
Insurance companies:
Differential earnings rate, tentative
(Notice 16) 12, 826
Prevailing state assumed interest
rates (RR 17) 13, 842
Interest:
Investment:
Federal short-term, mid-term, and
long-term rates for:
January 2000 (RR 1) 2, 250
February 2000 (RR 9) 6,497
March 2000 (RR 11) 10, 734
Rates:
Underpayment and overpayment,
quarter beginning April 1, 2000
(RR 16) 12, 780
Inventory:
LIFO:
Price indexes, department stores:
November 1999 (RR 3) 3, 297
December 1999 (RR 10) 8,643
January 2000 (RR 14) 12,779
Letter rulings, determination letters and
information letters issued by Associate
Chief Counsel (RP 1) 1, 4
Low-income housing credit:
Compliance monitoring (TD 8859) 5,
429
Resident population estimates (Notice
13) 9, 732
Major disaster and emergency areas,
losses (RR 15 ) 12, 774
Nonqualified preferred stock, exchanges
and distributions (REG–105089–99) 6,
580
Partnerships:
Adjustments following sales (Ann 13)
11, 771
Allocation of nonrecourse liabilities
2000–14 I.R.B.vApril 3, 2000
EXEMPT
ORGANIZATIONS cont.
INCOME TAX
cont.
INCOME TAX
cont.

April 3, 2000vi2000–14 I.R.B.
(REG–103831–99) 5,452
Amortization of intangible property
(REG–100163–00) 7, 633
Mergers and divisions
(REG–111119–99) 5, 455
Passive foreign investment companies:
Marketable stock (TD 8867) 7, 620
Qualified electing fund (TD 8870) 8,
647
Pre-filing agreement pilot program
(Notice 12) 9, 727
Presidentially declared disaster and com-
bat zone, relief (REG–101492–98) 3,
326; correction (Ann 16) 12, 837
Private foundations:
Disclosure rules (TD 8861) 5, 442
Organizations now classified as (Ann
8) 6,586
Proposed Regulations:
26 CFR 1.41–0, amended; 1.41–8,
revised; credit for increasing
research activities
(REG–105606–99) 4, 421
26 CFR 1.118–2, added; contribution
in aid of construction, definition
(REG–106012–98) 2, 290
26 CFR 1.132–0, amended; 1.132–9,
added; qualified transportation
fringes (REG–113572–99) 7, 624
26 CFR 1.197–2, amended; amortiza-
tion of intangible property
(REG–100163–00) 7, 633
26 CFR 1.337(d)–5T, added,
1.852–12, added; 1.857–11, added;
certain asset transfers to regulated
investment companies and real
estate investment trusts
(REG–209135–88) 8, 681
26 CFR 1.354–1, amended; 1.355–1,
amended; 1.356–7, added;
1.1036–1, amended; treatment of
nonqualified perferred stock and
other preferred stock in certain
exchanges and distributions
(REG–105089–99) 6, 580
26 CFR 1.367(b)–3, amended; stock
transfer rules (REG–116048–99) 6, 584
26 CFR 1.612–3, amended; depletion,
treatment of delay rental
(REG–103882–99) 8, 706
26 CFR 1.708–1, amended; 1.743–1,
amended; treatment of partnership
mergers and divisions
(REG–111119–99) 5, 455
26 CFR 1.752–3, amended; 1.752–5,
revised; allocation of nonrecourse
liabilities by a partnership
(REG–103831–99) 5, 452
26 CFR 1.860E–1, amended;
1.860H–0, –1, –2, –3, –4, –5, –6,
added; 1.860I–1, –2, added;
1.860J–1, added; 1.860L–1, –2, –3,
–4, added; 1.861–9T, amended;
1.861–10T, amended; financial asset
securitization investment trusts; real
estate mortgage investment conduits
(REG–100276–97;
REG–122450–98) 8, 682
26 CFR 1.861–4, amended; source of
compensation for labor or personal
services (REG–208254–90) 6, 577
26 CFR 1.883–0, added; 1.883–1,
revised; 1.883–2, –3, –4, –5, added;
exclusions from gross income of
foreign corporations
(REG–208280–86) 8, 654
26 CFR 1.988–1, revised; hyperinfla-
tionary currencies, definition
(REG–116567–99) 5, 463
26 CFR 1.6011–4, added; tax shelter
disclosure statements
(REG–103735–00) 11, 770
26 CFR 1.6041–2, revised; 1.6041–6,
revised; 1.6042–2, revised;
1.6043–2, revised; 1.6044–2,
revised; 1.6045–1, added; 1.6045–2,
revised; 1.6045–4, revised;
1.6047–1, revised; 1.6049–4,
revised; 1.6049–7, revised;
1.6050A–1, revised; 1.6050D–1,
revised; 1.6050E–1, revised;
1.6050H–2, revised; 1.6050J–1T,
revised; 1.6050P–1, revised;
1.6052–1, revised; 301.6651–1,
amended; extension of due date for
electronically filed information
returns; limitation of failure to pay
penalty for individuals during peri-
od of installment agreement
(REG–105279–99) 8, 707
26 CFR 301.6103(j)(5)–1, added; dis-
closure of return information;
Census of Agriculture
(REG–116704–99) 3, 325
26 CFR 301.6111–2, added; corporate
tax shelter registration
(REG–110311–98) 11, 767
26 CFR 301.6112–1, amended;
requirements to maintain list of
investors in potentially abusive tax
shelters (REG–103736–00) 11, 768
26 CFR 301.7508–1, added;
301.7508A–1, added; relief for ser-
vice in combat zone and for
Presidentially declared disaster
(REG–101492–98) 3, 326; correc-
tion (Ann 16) 12, 837
Publications:
515, changes to Tables 1 and 2 (Ann
11) 10, 739
1167, substitute forms, general
requirements (RP 19) 12, 785
1212, supplemental information (Ann
14) 11, 772
Qualified transportation fringe benefits
(REG–113572–99) 7, 624
Qualified Zone Academy Bonds (RP 10)
2, 287
Real estate investment trusts, asset trans-
fers to (TD 8872) 8, 639;
(REG–209135–88) 8, 681
Real estate mortgage investment con-
duits, safe harbor (REG–100276–97;
REG–122450–98) 8, 682
Recharacterizing financing arrangements,
fast-pay stock (TD 8853) 4, 377
Regulated investment companies, asset
transfers to (TD 8872) 8, 639;
(REG–209135–88) 8, 681
Regulations:
26 CFR 1.42–5, –6, amended; 1.42
–11, –12, –13, amended; 1.42–17,
added; compliance monitoring and
miscellaneous issues relating to the
low-income housing credit (TD
8859) 5, 429
26 CFR 1.62–2, amended; 1.62–2T,
removed; 1.274–5, added;
1.274–5T, amended; substantiation
of business expenses (TD 8864) 7,
614
26 CFR 1.162–11, amended;
1.167(a)–3, amended; 1.167(a)–6,
amended; 1.167(a)–14, added;
1.197–0, added; 1.197–2, added;
amortization of goodwill and certain
other intangibles (TD 8865) 7, 589
26 CFR 1.337(d)–5, added, certain
asset transfers to regulated invest-
ment companies and real estate
investment trusts (TD 8872) 8, 639
26 CFR 1.338–0, –1, –2, –3, removed;
1.338–4, redesignated as 1.338–8;
1.338–5, redesignated as 1.338–9;
1.338–4T, –5T, –6T, –7T, –10T,
INCOME TAX
cont.
INCOME TAX
cont.
INCOME TAX
cont.

added; 1.338(b)–1, added;
1.338(b)–2T, –3T, removed;
1.338(h)(10)–1, removed;
1.338(i)–1, removed; 1.338(i)–1T,
added; 1.1060–1T, revised; purchase
price allocations in deemed and
actual asset acquisitions (TD 8858)
4, 332
26 CFR 1.367(a)–3, amended;
1.367(b)–0, added; 1.367(b)–1, –2,
revised; 1.367(b)–3, added;
1.367(b)–4, revised; 1.367(b)–5, –6,
added; 1.367(b)–7, –8, –9, removed;
1.381(b)–1, amended; 7.367(b)–1,
–2, –3, –4, –5, –6, –7, –8, –9, –10,
–11, removed; 7.367(b)–12, amend-
ed; 7.367(b)–13, removed; stock
transfers rules (TD 8862) 6, 466
26 CFR 1.367(b)–3T, added; stock
transfer rules, (TD 8863) 6, 488
26 CFR 1.401(b)–1, amended;
1.401(b)–1T, removed; remedial
amendment period (TD 8871) 8, 641
26 CFR 1.513–7, added; travel and
tour activities of tax-exempt organi-
zations (TD 8874) 8, 644
26 CFR 1.663(a)–1, amended;
1.663(c)–1, amended; 1.663(c)–2,
revised; 1.663(c)–3, amended;
1.663(c)–4, redesignated as
1.663(c)–5, amended; 1.663(c)–4,
added; 1.663(c)–6, added; separate
shares rule applicable to estates (TD
8849) 2, 245
26 CFR 1.743–1, 1.754–1, 1.755–1,
corrected; adjustments following
sales of partnership interests (Ann
13) 11, 771
26 CFR 1.871–14, revised; 1.1441–1,
–4, –5, –6, –8, –9, revised;
1.1443–1, revised; 1.6042–3,
revised; 1.6045–1, revised;
1.6049–5, revised; withholding of
tax on certain U.S. source income
paid to foreign persons; delay of
effective date (TD 8856) 3, 298
26 CFR 1.936–11T, removed;
1.936–11, added; termination of
Puerto Rico and possession tax
credit (TD 8868) 6, 491
26 CFR 1.988–0, amended; 1.988–2,
amended; treatment of income and
expenses from certain hyperinfla-
tionary currencies; nonperiodic pay-
ments (TD 8860) 5, 437
26 CFR 1.1092(c)–1, added; equity
options with flexible terms (TD
8866) 6, 495
26 CFR 1.1291–1T, redesignated as
1.1291–1, revised; 1.1293–1T,
redesignated as 1.1293–1, revised;
1.1295–0, amended; 1.1295–1T,
redesignated as 1.1295–1, amended;
1.1295–3T, redesignated as
1.1295–3, amended; general rules
for making and maintaining quali-
fied electing fund elections (TD
8870) 8, 647
26 CFR 1.1296(e)–1, added; passive
foreign investment companies, mar-
ketable stock (TD 8867) 7, 620
26 CFR 1.1361–0, –1; amended;
1.1361–2, –3, –4, –5, –6, added;
1.1362–0, amended; 1.1362–2,
amended; 1.1362–8, added;
1,1368–0, amended; 1.1368–2,
amended; 1.1374–8, amended;
301.6109–1, amended; subchapter S
subsidiaries (TD 8869) 6, 498
26 CFR 1.1366–0, –1, added;
1.1366–2, revised; 1.1366–3, –4, –5,
added; 1.1367–0, –1, amended;
1.1367–3, revised; 1.1368–0, –1, –2,
–3, amended; 1.1368–4, revised;
passthrough of items of an S corpo-
ration to its shareholders (TD 8852)
2, 253
26 CFR 1.1441–10, added;
1.7701(1)–0, added; 1.7701(1)–3,
added; 602.101(b), amended;
recharacterizing financing arrange-
ments involving fast–pay stock (TD
8853) 4, 377
26 CFR 1.6011–4T, added; tax shelter
disclosure statements (TD 8877) 11,
747
26 CFR 1.6038–3, added; 1.6038–2,
amended; 1.6038B–1, amended;
1.6038B–2, amended; information
reporting with respect to certain for-
eign partnerships and certain foreign
corporations (TD 8850) 2, 265
26 CFR 1.6046A–1, added; return
requirement for U.S. persons acquir-
ing or disposing of an interest in a
foreign partnership (TD 8851) 2,
275
26 CFR 301.6103(j)(5)–1T, added;
disclosure of return information;
Census of Agriculture (TD 8854) 3,
306
26 CFR 301.6104(d)–1, removed;
301.6104(d)–2, redesignated as
301.6104(d)–0, revised;
301.6104(d)–3, redesignated as
301.6104(d)–1, amended;
301.6104(d)–4, redesignated as
301.6104(d)–2, amended;
301.6104(d)–5, redesignated as
301.6104(d)–3, amended;
602.101(b), amended; private foun-
dation disclosure rules (TD 8861) 5,
442
26 CFR 301.6112–1T, amended;
requirements to maintain list of
investors in potentially abusive tax
shelters (TD 8875) 11, 761
26 CFR 301.6111–2T, added; corpo-
rate tax shelter registration (TD
8876) 11, 753
Removal costs, capital expenditures (RR
7) 9, 712
Reorganizations:
Divisive mergers, definition (RR 5) 5,
436
Solely for voting stock requirement
(Notice 1) 2, 288
Research credit, controlled group
(REG–105606–99) 4, 421
S corporations:
Passthrough items (TD 8852) 2, 253;
correction (Ann 18) 13,846
Subsidiaries (TD 8869) 6, 498
Separate shares rules (TD 8849) 2, 245
Short-term Treasury bills (Ann 14) 11,
772
Sources of income, compensation for
labor or services (REG–208254–90) 6,
577
Tax conventions:
New treaties with Estonia, Latvia,
Lithuania, Venezuela;
Publication 515 changes (Ann 11)
10, 739
Treaties with Austria, Ireland, South
Africa; Publication 515 changes (Ann
11) 10,
739
United Kingdom; repeal of advance
corporation tax (RP 13) 6, 515
Tax shelters:
Confidential corporate, registration
(TD 8876) 11, 753;
(REG–110311–98) 11,753
Disclosure statements (TD 8877) 11,
2000–14 I.R.B.viiApril 3, 2000
INCOME TAX
cont.
INCOME TAX
cont.
INCOME TAX
cont.

747; (REG–103735–00) 11, 770
Listed transactions (Notice 15) 12, 826
Office of Tax Shelter Analysis (Ann
12) 12,835
Potentially abusive, list of investors
(TD 8875) 11, 761;
(REG–103736–00) 11, 768
Technical advice to district directors and
chiefs, appeals office, from Associate
Chief Counsel (RP 2) 1, 73
Variable annuity contracts, closing agree-
ments (Notice 9) 5, 449
Withholdings:
Qualified intermediary withholding
agreements (RP 12) 4, 387
U.S. source income payments to for-
eign persons, delay of effective date
(TD 8856) 3, 298
April 3, 2000viii2000–14 I.R.B.
INCOME TAX
cont.

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