Part I. Rulings — Internal Revenue Bulletin 1996-47

Section 42.—Low-Income Housing Credit

26 CFR 1.42–14: Allocation rules for post-1989 State housing credit ceiling amounts.

This procedure supplements Rev. Proc. 96–46, 1996–38 I.R.B. 144, by publishing amounts of unused housing credit carryovers allocated to qualified states under § 42(h)(3)(D) of the Internal Revenue Code for calendar year 1996 in addition to those published in Rev. Proc. 96–46. This revenue procedure also publishes the total amounts of unused housing credit carryovers allocated to qualified states under § 42(h)(3)(D) for calendar year 1996.

Section 401.—Qualified Pension, Profit-Sharing, and Stock Bonus Plans

Covered compensation tables; 1997. The covered compensation tables for the 1997 calendar year for determining contributions to defined benefit plans and permitted disparity are set forth.

Rev. Rul. 96–53

This revenue ruling provides tables of covered compensation under § 401(l)(5)(E) of the Internal Revenue Code (the ‘‘Code’’) and the Income Tax Regulations, thereunder, for the 1997 plan year.

Section 401(l)(5)(E)(i) defines covered compensation with respect to an employee, as the average of the contribution and benefit bases in effect under § 230 of the Social Security Act (the ‘‘Act’’) for each year in the 35-year period ending with the year in which the employee attains social security retirement age.

Section 401(l)(5)(E)(ii) of the Code states that the determination for any year preceding the year in which the employee attains social security retirement age shall be made by assuming that there is no increase in covered compensation after the determination year and before the employee attains social security retirement age.

Section 1.401(l)–1(c)(34) of the regulations defines the taxable wage base as the contribution and benefit base under § 230 of the Act.

Section 1.401(l)–1(c)(7)(i) defines covered compensation for an employee as the average (without indexing) of the taxable wage bases in effect for each calendar year during the 35-year period ending with the last day of the calendar year in which the employee attains (or will attain) social security retirement age. A 35-year period is used for all in

dividuals regardless of the year of birth of the individual. In determining an employee’s covered compensation for a plan year, the taxable wage base for all calendar years beginning after the first day of the plan year is assumed to be the same as the taxable wage base in effect as of the beginning of the plan year. An employee’s covered compensation for a plan year beginning after the 35-year period applicable under § 1.401(l)–1(c)(7)(i) is the employee’s covered compensation for a plan year during which the 35-year period ends. An employee’s covered compensation for a plan year beginning before the 35-year period applicable under § 1.401–1(c)(7)(i) is the taxable wage base in effect as of the beginning of the plan year.

Section 1.401(l)–1(c)(7)(ii) provides that, for purposes of determining the amount of an employee’s covered compensation under § 1.401(l)–1(c)(7)(i), a plan may use tables, provided by the Commissioner, that are developed by rounding the actual amounts of covered compensation for different years of birth.

For purposes of determining covered compensation for the 1997 year the taxable wage base is $65,400.

The following tables provide covered compensation for 1997:

1997 Covered Compensation Table

1907 1972 $4,488 1908 1973 4,704 1909 1974 5,004 1910 1975 5,316 1911 1976 5,664 1912 1977 6,060 1913 1978 6,480 1914 1979 7,044 1915 1980 7,692 1916 1981 8,460 1917 1982 9,300 1918 1983 10,236 1919 1984 11,232 1920 1985 12,276 1921 1986 13,368 1922 1987 14,520 1923 1988 15,708 1924 1989 16,968 1925 1990 18,312 1926 1991 19,728

Calendar Year

Calendar

of Social

1997 Covered Compensation

Year of

Security Retirement

Age

Birth

Calendar Year

Calendar

of Social

1997 Covered Compensation

1927 1992 21,192 1928 1993 22,716 1929 1994 24,312 1930 1995 25,920 1931 1996 27,576 1932 1997 29,304 1933 1998 31,032 1934 1999 32,772 1935 2000 34,500 1936 2001 36,180 1937 2002 37,860 1938 2004 41,148 1939 2005 42,792 1940 2006 44,448 1941 2007 46,056 1942 2008 47,616 1943 2009 49,104 1944 2010 50,568 1945 2011 52,008 1946 2012 53,400 1947 2013 54,768 1948 2014 55,980 1949 2015 57,108 1950 2016 58,128 1951 2017 59,064 1952 2018 59,916 1953 2019 60,708 1954 2020 61,440 1955 2022 62,724 1956 2023 63,312 1957 2024 63,804 1958 2025 64,212 1959 2026 64,560 1960 2027 64,836 1961 2028 65,064 1962 2029 65,196 1963 2030 65,316 1964 or later 2031 65,400

1997 Rounded Covered Compensation Table

Year of

Security Retirement

Age

Birth

Year of Birth

Covered Compensation

1932–1933 $30,000 1934 33,000 1935–1936 36,000 1937 39,000 1938–1939 42,000 1940–1941 45,000 1942–1943 48,000 1944–1945 51,000 1946–1947 54,000 1948–1950 57,000 1951–1954 60,000

1997 Rounded Covered Compensation Table—Continued

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, September 30, 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.

Year of Birth

Covered Compensation

1955–1957 63,000 1958 or later 65,400

Drafting Information

The principal author of this revenue ruling is Donna Prestia of the Employee Plans Division. For further information regarding this revenue ruling, call (202) 622–6076 between 2:30 and 4:00 Eastern time (not a toll free number) Monday thru Thursday. Ms. Prestia’s number is (202) 622–7377 (also not a toll free number).

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

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

LIFO; price indexes; department stores. The September 1996 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and lastin, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, September 30, 1996.

Rev. Rul. 96–54

The following Department Store Inventory Price Indexes for September 1996 were issued by the Bureau of Labor Statistics on October 16, 1996. The indexes are accepted by the Internal

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

(January 1941 = 100, unless otherwise noted)

Groups Sep. 1995 Sep. 1996

Percent Change from Sep. 1995

to Sep. 1996 ¹

Piece Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 538.3 534.8 �0.7
Domestics and Draperies . . . . . . . . . . . . . . . . . . . . . . . . . 663.4 644.1 �2.9
Women’s and Children’s Shoes . . . . . . . . . . . . . . . . . . . . 646.4 647.9 0.2
Men’s Shoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 926.9 916.1 �1.2
Infants’ Wear. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627.1 631.9 0.8
Women’s Underwear . . . . . . . . . . . . . . . . . . . . . . . . . . . . 517.1 536.0 3.7
Women’s Hosiery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285.7 289.0 1.2
Women’s and Girls’ Accessories . . . . . . . . . . . . . . . . . . . 555.5 557.1 0.3
Women’s Outerwear and Girls’ Wear . . . . . . . . . . . . . . . 418.9 407.2 �2.8
Men’s Clothing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 619.5 612.0 �1.2
Men’s Furnishings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 558.7 573.6 2.7
Boys’ Clothing and Furnishings . . . . . . . . . . . . . . . . . . . 482.8 489.8 1.4
Jewelry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1031.4 1040.3 0.9
Notions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 803.3 795.2 �1.0
Toilet Articles and Drugs. . . . . . . . . . . . . . . . . . . . . . . . . 863.0 895.9 3.8
Furniture and Bedding . . . . . . . . . . . . . . . . . . . . . . . . . . . 665.6 675.6 1.5
Floor Coverings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563.1 589.9 4.8
Housewares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 798.9 810.0 1.4
Major Appliances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249.7 247.1 �1.0
Radio and Television . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81.7 77.2 �5.5
Recreation and Education ² . . . . . . . . . . . . . . . . . . . . . . . . 114.3 111.4 �2.5
Home Improvements ² . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121.7 125.9 3.5
Auto Accessories ² . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106.9 107.0 0.1

Groups 1–15: Soft Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 596.7 596.8 0.0

Groups 16–20: Durable Goods . . . . . . . . . . . . . . . . . . . . . . . . . 470.1 469.0 �0.2

Groups 21–23: Misc. Goods ² . . . . . . . . . . . . . . . . . . . . . . . . . . 114.0 112.6 �1.2

Store Total ³ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 553.2 552.2 �0.2

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).