HIGHLIGHTS OF THIS ISSUE

These synopses are intended only as aids to the reader in identifying the subject matter covered. They may not be relied upon as authoritative interpretations.

INCOME TAX

Rev. Rul. 97–1, page 10. Federal rates; adjusted federal rates; adjusted fed- eral 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 January 1997.

Rev. Rul. 97–2, page 8. Insurance companies; interest rate tables. Prevailing state assumed interest rates are provided for the determination of reserves under section 807 of the Code for contracts issued in 1996 and 1997. Rev. Rul. 92–19 supplemented in part.

Rev. Rul. 97–3, page 5. SBA guaranteed payment rights; participating securi- ties. The Small Business Administration (SBA) is the primary obligor of the guaranteed payment rights that are created under its participating security program and investors in those rights are treated as owning SBA debt.

T.D. 8697, page 11. Final regulations under section 7701 of the Code classify certain business organizations under an elective regime.

Notice 97–1, page 22. Revenue rulings and revenue procedures under T.D. 8697 obsoleted. Revenue rulings and revenue procedures that use the prior classification regulations to differentiate between partnerships and associations are obsolete to the extent that they rely on those prior regulations.

Notice 97–4, page 24. S corporation subsidiaries. This notice requests comments concerning issues raised by section 1308 of the Small Business Job Protection Act of 1996 which permits an S corporation (1) to own 80 percent or more

Finding Lists begin on page 63.