Part I. Rulings — Internal Revenue Bulletin 1996-39

Section 42.—Low-Income Housing Credit

Low-income housing credit; satis- factory bond; ‘‘bond factor’’ amounts for the period July through Septem- ber 1996. This ruling announces the monthly bond factor amounts to be used by taxpayers who dispose of qualified low-income buildings or interests therein during the period July through September 1996.

Rev. Rul. 96–45

In Rev. Rul. 90–60, 1990–2 C.B. 3, the Internal Revenue Service provided guidance to taxpayers concerning the general methodology used by the Treasury Department in computing the bond factor amounts used in calculating the amount of bond considered satisfactory by the Secretary under § 42(j)(6) of the Internal Revenue Code. It further announced that the Secretary would pub

Table 1 Rev. Rul. 96–45

lish in the Internal Revenue Bulletin a table of ‘‘bond factor’’ amounts for dispositions occurring during each calendar month.

This revenue ruling provides in Table 1 the bond factor amounts for calculating the amount of bond considered satisfactory under § 42(j)(6) for dispositions of qualified low-income buildings or interests therein during the period July through September 1996.

Monthly Bond Factor Amounts for Dispositions Expressed

As a Percentage of Total Credits

Calendar Year Building Placed in Service or, if Section 42(f)(1) Election Was Made, the Succeeding Calendar Year

Month of Disposition 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996

Jul ’96 81.06 83.47 86.09 89.16 92.78 96.94 101.25 105.33 109.16 112.52 Aug ’96 80.84 83.24 85.85 88.92 92.52 96.67 100.96 105.04 108.90 112.52 Sep ’96 80.61 83.01 85.62 88.68 92.28 96.41 100.68 104.76 108.66 112.52

For a list of bond factor amounts applicable to dispositions occurring during other calendar years, see the following revenue rulings: Rev. Rul. 90–60, 1990–2 C.B. 3, for dispositions occurring during calendar years 1987, 1988, and 1989; Rev. Rul. 90–88, 1990–2 C.B. 7, for dispositions occurring during calendar year 1990; Rev. Rul. 91–67, 1991–2 C.B. 13, for dispositions occurring during calendar year 1991; Rev. Rul. 92–101, 1992–2 C.B. 9, for dispositions occurring during calendar year 1992; Rev. Rul 93–83, 1993–2 C.B. 6, for dispositions occurring during calendar year 1993; Rev. Rul. 94–71, 1994–2 C.B. 4, for dispositions occurring during calendar year 1994; Rev. Rul. 95–83, 1995–2 C.B. 8, for dispositions occurring during calendar year 1995; Rev. Rul. 96–16, 1996–11 I.R.B. 4, for dispositions occurring during the period January through March 1996; and Rev. Rul. 96–33, 1996–27 I.R.B. 4, for dispositions occurring during the period April through June 1996.

DRAFTING INFORMATION

The principal author of this revenue ruling is Jack Malgeri of the Office of Assistant Chief Counsel (Passthroughs and Special Industries). For further information regarding this revenue ruling, contact Mr. Malgeri at (202) 622–3040 (not a toll-free call).

Section 472.—Last-in, First-out Inventories

26 CFR 1.472–1: Last-in, first-out inventories.

LIFO; price indexes; department stores. The July 1996 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, July 31, 1996.

Rev. Rul. 96–46

The following Department Store Inventory Price Indexes for July 1996 were issued by the Bureau of Labor Statistics on August 13, 1996. The indexes are accepted by the Internal Revenue Service, under § 1.472–1(k) of the Income Tax Regulations and Rev. Proc. 86–46, 1986–2 C.B. 739, for appropriate application to inventories of department stores employing the retail inventory and last-in, first-out inventory methods for tax years ended on, or with reference to, July 31, 1996.

The Department Store Inventory Price Indexes are prepared on a national basis and include (a) 23 major groups of departments, (b) three special combinations of the major groups - soft goods, durable goods, and miscellaneous goods, and (c) a store total, which covers all departments, including some not listed separately, except for the following: candy, foods, liquor, tobacco, and contract departments.

BUREAU OF LABOR STATISTICS, DEPARTMENT STORE INVENTORY PRICE INDEXES BY DEPARTMENT GROUPS

(January 1941 = 100, unless otherwise noted)

Percent Change from

July 1995 to

July 1996 ¹

Groups

July July 1995 1996

Piece Goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 515.5 539.2 4.6
Domestics and Draperies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 656.6 635.6 �3.2
Women’s and Children’s Shoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 617.5 643.9 4.3
Men’s Shoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 914.5 888.2 �2.9
Infants’ Wear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 596.5 609.3 2.1
Women’s Underwear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 526.0 536.9 2.1
Women’s Hosiery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283.3 289.3 2.1
Women’s and Girls’ Accessories . . . . . . . . . . . . . . . . . . . . . . . . . . . . 546.7 544.7 �0.4
Women’s Outerwear and Girls’ Wear. . . . . . . . . . . . . . . . . . . . . . . . . 398.1 380.6 �4.4
Men’s Clothing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 593.3 610.3 2.9
Men’s Furnishings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 550.5 573.0 4.1
Boys’ Clothing and Furnishings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 474.7 475.9 0.3
Jewelry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 999.0 1016.0 1.7
Notions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 838.7 779.4 �7.1
Toilet Articles and Drugs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 861.1 880.9 2.3
Furniture and Bedding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 657.8 671.6 2.1
Floor Coverings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563.7 577.5 2.4
Housewares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 777.6 811.9 4.4
Major Appliances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245.2 245.8 0.2
Radio and Television. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82.0 79.2 �3.4
Recreation and Education ² . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113.9 112.7 �1.1
Home Improvements ² . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122.4 126.8 3.6
Auto Accessories ² . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106.7 107.0 0.3

Groups 1–15: Soft Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 580.5 582.4 0.3

Groups 16–20: Durable Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 462.4 470.3 1.7

Groups 21–23: Misc. Goods ² . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113.8 113.5 �0.3

Store Total ³ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 541.2 544.2 0.6

1 Absence of a minus sign before percentage change in this column signifies price increase. 2 Indexes on a January 1986=100 base. 3 The store total index covers all departments, including some not listed separately, except for the following: candy, foods, liquor, tobacco, and contract departments.

DRAFTING INFORMATION

The principal author of this revenue ruling is Stan Michaels of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact Mr. Michaels on (202) 622–4970 (not a toll-free call).

Section 561.—Definition of Deduction for Dividends Paid

26 CFR 1.561–1: Deduction for dividends paid.

If a regulated investment company makes distributions to shareholders that vary as a result of the allocation of certain expenses, may the company include those distributions in the amount of its deduction for dividends paid? See Rev. Proc. 96–47, page 10.

Section 562.—Rules Applicable in Determining Dividends Eligible for Dividends Paid Deduction

26 CFR 1.562–2: Preferential dividends.

Section 852.—Taxation of Regulated Investment Companies and Their Shareholders

26 CFR 1.852–1: Taxation of regulated investment companies.

26 CFR 1.852–3: Investment company taxable income.

If a regulated investment company makes distributions to shareholders that vary as a result of the allocation of certain expenses, may the company deduct the distributions for purposes of computing the company’s investment company taxable income? See Rev. Proc. 96–47, page 10.