18 Fraud fraud as to 1960 since collateral estoppel applies not only to the parties in a prior suit but to their privies as well. Held, the wife was not collaterally estopped to deny fraud as to 1960 in the absence of proof of fraud on her part. (Sec. 6653, '54 Code.) Kathleen C. Vannaman, 54 T.C. 1011, Nonacq., 1975-7 I.R.B. 6. Gain or loss (See also specific subject headings) Recognition 236.50 Partnership interests exchanged. On the exchange of a general partnership interest in one California partnership for a general partnership interest in a California limited partnership, both partnerships engaged in renting apartments before and after the exchange, it was held that the exchanged partnership interests were proprietary interests qualifying for nonrecognition of gain and not subject to the exclusion in the parenthetical clause of section 1031(a) of the Code. (Sec. 1031, '54 Code.) Rollin E. Meyer, Jr., 58 T.C. 311, Nonacq., 1975-7 I.R.B. 6. Gross income (See also specific subject headings) Exclusions-inclusions 246.100 NLRB award. A NLRB award for pay lost due to an illegal discharge caused by a labor organization is includible in the recipient's gross income even though such award does not constitute wages for employment tax purposes. Rev. Rul. 57-55 relating to the treatment of such award as wages for employment tax purposes is amplified. §1.61-1. (Sec. 61, '54 Code.) Rev. Rul. 75-64, 1975-9 I.R.B. 5. 246.150 Political contributions; service promised contributor. Payments to a political campaign specified by a candidate or officeholder in exchange for his promise, not of a traditional and legitimate political nature, to perform a service for the contributor do not qualify as excludable political expense contributions and must be included in the gross income of the political candidate or officeholder. §1.61-1. (Sec. 61, '54 Code.) Rev. Rul. 75-103, 1975-13 I.R.B. 6. 246.175 Examples discuss the treatment of reimbursed moving expenses of a U.S. citizen who performs services abroad for his domestic employer, and whose foreign earnings qualify for exclusion from gross income under section 911(a) of the Code, and explain the extent to which his moving expenses are deductible and the extent to which the reimbursement is includible in his gross income and subject to tax withholding. The examples cover moving to the foreign country and moving back to the U.S. (1) to work for the same employer, (2) to work for a different employer, and (3) to retire. §§1.82-1, 1.217-1, 1.911-2. (Secs. 82, 217, 911, 3401; '54 Code.) Rev. Rul. 75-84, 1975-11 I.R.B. 8. 246.200 Work-training programs; removed air traffic controllers. Payments made by the Department of Transportation to or on behalf of individuals, removed from their positions as air traffic controllers, for expenses incurred, in their training for other employment are not scholarships, fellowship grants, or governmental welfare type payments and are includible in the individual's gross income. §1.61-1. (Secs. 61, 3401; '54 Code.) Rev. Rul. 75-32, 1975-5 I.R.B. 5. When included 250.30 Cotton producer; loan from The amount of an unpaid loan from the Commodity Credit Corporation to a cotton producer, who has not elected under section 77 of the Code to treat the loan as income in the taxable year received, is includible in his gross income in the year in which his liability on the loan is discharged by transferring to the Corporation his ownership of the cotton pledged as security. Any additional amount realized by the producer from the Corporation's sale of the cotton for more than the amount owed is includible in his income in the taxable year received if he uses the cash method or the year his right to the amount becomes fixed if he uses the accrual method. I.T. 4016 superseded. §1.451-1. (Sec. 451, '54 Code.) Rev. Rul. 75-57, 1975-8 I.R.B. 18. 250.50 Crop insurance proceeds; election. Crop disaster payments received by a cash-method farmer from the Department of Agriculture under the Agricultural Act of 1949, as amended, because of crop damage from natural disasters in the same taxable Index Digests year do not qualify for the treatment provided by section 451(d) of the Code and must be included in gross income for the year received. §1.451-6. (Sec. 451, '54 Code.) Rev. Rul. 75-36, 1975-6 I.R.B. 7. 250.60 Crop shares; contributed to charity or used as feed. The fair market value of crop shares received as rent by a farmer-landlord, which are contributed to a charitable organization or are used as feed in the farming operation, must be included in the farmer-landlord's gross income at the time of such contribution or use. The taxpayer is considered to have made a charitable contribution or becomes entitled to a business expense deduction at the same time and in the same amount as the income recognized. Taxpayer may be entitled to use the optional method of determining net earnings from self-employment under section 1402(a) and the retirement income credit under section 37. Rev. Ruls. 56-496 and 63-66 modified. §§1.61-4, 1.162-12, 1.170A-1, 301.7805-1. (Secs. 61, 162, 170, 7805; '54 Code.) Rev. Rul. 75-11, 1975-2 I.R.B. 5. 250.100 Lump-sum payment in relinquishment of seniority rights. A lump-sum payment received by a railroad employee as consideration for relinquishing employment seniority rights is ordinary income in the taxable year of receipt and the payment constitutes compensation for purposes of the RRTA and is wages for purposes of income tax withholding. Rev. Rul. 58-301 distinguished and Rev. Rul. 59227 superseded. §§1.61-1, 1.1221-1, 1.1222-1, 301.7805-1. (Secs. 61, 1221, 1222, 3231, 3401, 7805; '54 Code.) Rev. Rul. 75-44, 1975-7 I.R.B. 7. 250.150 Original issue discount; ratable inclusion of interest on church bonds. The ratable inclusion rules of section 1232(a)(3) of the Code apply to interest earned on a nonprofit corporate church's 10-year bonds issued at par, bearing annual interest of 7 percent compounded semiannually, and payable only at the maturity of the bonds. §1.1232-3A. (Sec. 1232, '54 Code.) Rev. Rul. 75-112, 1975-13 I.R.B. 17. Husband and Wife 254.50 State income tax deduction; joint returns. State income taxes imposed upon a married taxpayer and paid during the taxable year are deductible on a joint Federal return Index Digests regardless of which spouse actually paid the Rev. Rul. 75-47, 1975-7 I.R.B. 9. Improvements 260.50 Mining; underground pumping Expenditures incurred at a producing Rev. Rul. 75-60, 1975-8 I.R.B. 19. Income averaging 262.20 Eligible individual; scholarship. A taxpayer who in one of his base period Rev. Rul. 75-40, 1975-6 I.R.B. 21. Income in respect of 264.10 Bonus; usufruct; Louisiana. A widow domiciled in Louisiana whose Income source 266.30 Citizen; foreign resident; excludable Examples are given to show the computa- to the excluded income, in situations involv- Rev. Rul. 75-86, 1975-11 I.R.B. 13. 266.50 Citizen in foreign country; Atomic A U.S. citizen employed by the Atomic Rev. Rul. 75-30, 1975-4 I.R.B. 12. 266.80 Citizens; employed abroad by domestic Examples discuss the treatment of reim- Rev. Rul. 75-84, 1975-11 I.R.B. 8. 266.90 The treatment is prescribed, under sec- Rev. Rul. 75-85, 1975-11 I.R.B. 11. Insurance Premiums 276.20 Banks; borrower's life insurance policy Premiums paid by a bank during its tax- Insurance companies: Life 19 er's life insurance policy assigned to it as Rev. Rul. 75-46, 1975-7 I.R.B. 8. 276.70 Group-term life insurance purchased A group insurance policy providing life in- Rev. Rul. 75-91, 1975-12 I.R.B. 8. Proceeds 278.40 Farmers; crop destruction; election. Crop disaster payments received by a Rev. Rul. 75-36, 1975-6 I.R.B. 7. 278.80 Settlement under aircraft liability An amount received by the estate of an Insurance companies Life 280.20 Assets; partnership interest. The partnership interest acquired by a life 20 Insurance companies: Life tion is an asset taken into account as an Rev. Rul. 75-62, 1975-8 I.R.B. 22. 280.80 Reserves; revaluation; additional State A life insurance company that computes Rev. Rul. 75-51, 1975-7 I.R.B. 11. Interest Paid 290.30 Beneficiary's mortgage held by trust; Income of a testamentary trust required Rev. Rul. 75-68, 1975-9 I.R.B. 7. 290.50 Debentures; issued to controlled trusts. A corporate taxpayer deducted interest Mark Bixby, 58 T.C. 757, Acq., 1975-12 290.80 Life insurance policy loans. Taxpayers, husband and wife, each pur- loans on the cash values. Each policy called Rufus C. Salley, 55 T.C. 896, Acq. in re- 290.100 Loan discount; cash or accrual A loan discount that is the agreed charge Received 292.10 Beneficiary's mortgage held by trust; Income of a testamentary trust required Rev. Rul. 75-68, 1975-9 I.R.B. 7. 292.50 Premature withdrawal; time savings A series of questions and answers explain 292.55 Premature withdrawal; time savings Examples illustrate alternate methods of Index Digests clarified and modified. §§1.62-1, 1.165-1, Rev. Rul. 75-21, 1975-3 I.R.B. 39. 292.80 Ratable inclusion; church bonds; The ratable inclusion rules of section Inventories 296.20 Dealer in foreign exchange. A dealer in foreign exchange who regu- Rev. Rul. 75-104, 1975-13 I.R.B. 6. 296.40 Farm-price; poultry raised for egg An accrual method corporation that pur- Rev. Rul. 75-37, 1975-6 I.R.B. 6; W.P. 296.60 LIFO; financial conformity A LIFO election, reelection, or extension Index Digests Rev. Proc. 73-37 amplified. §§1.472-1, 1.4722. (Sec. 601.204, S.P.R.; Sec. 472, '54 Code.) Rev. Proc. 75-10, 1975-7 I.R.B. 16. 296.80 LIFO; financial conformity requirements. A taxpayer adopting the LIFO inventory method may, without violating section 472(c) and (e) of the Code, include on its balance sheet a footnote or parenthetical statement disclosing the excess of replacement cost or current cost over LIFO stated value. Rev. Rul. 73-66 amplified. §1.472-2. (Sec. 472, '54 Code.) Rev. Rul. 75-50, 1975-7 I.R.B. 11. 296.100 LIFO; financial conformity requirements. The issuance of an annual report using inventories valued under the FIFO method invalidates a subsequent election to use the LIFO method for the year reported. §1.4722. (Sec. 472, '54 Code.) Rev. Rul. 75-49, 1975-7 I.R.B. 11. 296.120 Valuation; election; returns under examination. The application of transition rules under section 1.471-11(e) of the regulations to situations in which an issue involving the method of inventory costing is raised in an examination of a return during the two-year transition period provided in section 1.47111(e)(1)(ii) is explained. §§1.446-1, 1.471-11. (Sec. 601.204, S.P.R.; Secs. 446, 471, '54 Code.) Rev. Proc. 75-4, 1975-4 I.R.B. 20. Investment credit 298.30 Air conditioning and heating; factory building. Built-in air conditioning or heating units that supplement factory-wide central air conditioning and heating systems and those with extensive duct work serving one or more local areas do not qualify as section 38 property; but window air conditioning units, portable plug-in heaters, and the air conditioning or heater units used to maintain certain temperature and humidity requirements essential to a particular process or production activity qualify. §1.48-1. (Sec. 48, '54 Code.) Rev. Rul. 75-77, 1975-10 I.R.B. 6. 298.60 Air handling and safety equipment; factory building. Air handling or safety equipment units that service a building as a whole relate to the operation and maintenance of the building and are structural components that do not qualify as section 38 property; but when necessary to, and used directly with, a single machine or a specific process such as paint spraying or welding they are tangible personal property that qualifies. §1.48-1. (Sec. 48, '54 Code.) Rev. Rul. 75-78, 1975-10 I.R.B. 7. 298.90 Cable antenna television system; partnership lessor. A cable antenna television system, owned by a partnership formed solely to finance the construction and lease of the system to a corporate operator, does not qualify as property manufactured by the partnership, and the partnership is not entitled to investment credit. Rev. Rul. 68-445 distinguished. §§1.38-1, 1.46-4. (Secs. 38, 46; '54 Code.) Rev. Rul. 75-1, 1975-1 I.R.B. 11. 298.120 Carryback; affiliated group; new subsidiaries. The portion of consolidated unused investment credit of an affiliated group filing a consolidated return, attributable to the common parent's two new wholly owned subsidiaries, may be carried back to the parent's separate return for a year in which the subsidiaries were not in existence but may not be carried back to any other member of the group. §1.1502-79. (Sec. 1502, '54 Code.) Rev. Rul. 75-54, 1975-7 I.R.B. 14. 298.150 Unused; allowance in closed year; net operating loss carryback adjusted. Due to a net operating loss for fiscal 1967, taxpayers filed for a tentative carryback adjustment to 1964 and received the claimed refund. It was later determined that the loss for 1967 was overstated and a deficiency existed for the amount of the carryback refund. The taxpayers sought to offset an unused investment credit attributable to the year 1964 against the deficiency even though the credit had not been claimed and any claim was barred by statute. Held, the taxpayers are entitled to the benefit of an unused investment credit for fiscal 1964 to the extent of, but not in excess of, the amount of the deficiency for that year. (Sec. 6501, '54 Code.) James G. Maxcy, 59 T.C. 716, Nonacq., 1975-6 I.R.B. 5. Joint returns (See: Husband and wife) Levy 306.50 Interest rate. Examples are provided for the computation of the 9 percent interest rate on underpayments and overpayments of tax, effec Trustee in bankruptcy; withholding taxes; priority. A trustee in bankruptcy is obligated to withhold, report, and pay over income and Social Security taxes from payment of priority claims for employee's wages earned prior to, but unpaid at the time of, an employer's bankruptcy. Proofs of claim on the part of the U.S. with respect to the taxes are not required and the taxes are entitled to second priority of payment under section 64(a) of the Bankruptcy Act. §1.6011-1. (Sec. 6011, '54 Code.) Otte, 419 U.S., Ct. D. 1969, 1975-2 I.R.B. 10. Limitation period 316.50 Investment credit; unused; closed carryback year. Due to a net operating loss for fiscal 1967, taxpayers filed for a tentative carryback adjustment to 1964 and received the claimed refund. It was later determined that the loss for 1967 was overstated and a deficiency existed for the amount of the carryback refund. The taxpayers sought to offset an unused investment credit attributable to the year 1964 against the deficiency even though the credit had not been claimed and any claim was barred by statute. Held, the taxpayers are entitled to the benefit of an unused investment credit for fiscal 1964 to the extent of, but not in excess of, the amount of the deficiency for that year. (Sec. 6501, '54 Code.) James G. Maxcy, 59 T.C. 716, Nonacq., 1975-6 I.R.B. 5. Liquidations 318.40 Distributions; determination of taxable status. Instructions and guidelines are set forth relating to the determination of the taxable status of corporate distributions and the supporting information to be furnished to the Service. Rev. Proc. 65-10 and 67-12 superseded. §§1.301-1, 1.316-1, 1.333-1, 1.6042-2. (Sec. 601.602, S.P.R.; Secs. 301, 316, 333, 6042, '54 Code.) Rev. Proc. 75-17, 1975-13 I.R.B. 20. 22 Liquidations 318.80 Partial; contraction of business; The termination of a contract represent- Rev. Rul. 75-3, 1975-1 I.R.B. 12. Livestock (See: Farmers and farming) Loans 320.20 Commodity Credit Corporation; cotton The amount of an unpaid loan from the Rev. Rul. 75-57, 1975-8 I.R.B. 18. Losses 322.20 Casualty; State grants to flood victims; A grant received under a Pennsylvania Rev. Rul. 75-28, 1975-4 I.R.B. 10. 322.40 Foreign exchange; advance to foreign A calendar-year accrual-method domestic Rev. Rul. 75-109, 1975-13 I.R.B. 14. 322.60 Foreign exchange; current accounts An accrual method domestic corporation Rev. Rul. 75-108, 1975-13 I.R.B. 13. 322.80 Interest forfeited on premature A series of questions and answers explain 322.100 Interest forfeited on premature Examples illustrate alternate methods of Rev. Rul. 75-21, 1975-3 I.R.B. 39. 322.140 Worthless corporate stock held by An officer-stockholder of a stock broker- Index Digests growth when the stock appeared to be an Rev. Rul. 75-13, 1975-2 I.R.B. 6. Medical expenses 326.40 Unemployment disability benefits fund Contributions made by employers and Rev. Rul. 75-48, 1975-7 I.R.B. 9. Ministers 330.45 Rental allowance; portion of pension The portion of a retired minister's pension Rev. Rul. 75-22, 1975-3 I.R.B. 5. Moving expenses 336.30 Citizens; employed abroad by domestic Examples discuss the treatment of reim- Rev. Rul. 75-84, 1975-11 I.R.B. 8. |