SEC. 4. EFFECT ON OTHER

REVENUE PROCEDURES

Revenue Procedure 97–32, 1997–27 I.R.B. 9, covering paper returns and statements for payments made during the 1997 calendar year is hereby superseded. Revenue Procedure 97–32A, Addendum to Revenue Procedure 97–32, 1997–27 I.R.B. 9 which provides the Rules and Specifications for Private Printing of Forms 1096, 1099 Series, 5498 and W–2G is hereby superseded.

1998–26 I.R.B. 15 June 29, 1998

June 29, 1998 16 1998–26 I.R.B.

1998–26 I.R.B. 17 June 29, 1998

June 29, 1998 18 1998–26 I.R.B.

1998–26 I.R.B. 19 June 29, 1998

June 29, 1998 20 1998–26 I.R.B.

June 29, 1998 22 1998–26 I.R.B.

1998–26 I.R.B. 23 June 29, 1998

June 29, 1998 24 1998–26 I.R.B.

1998–26 I.R.B. 25 June 29, 1998

June 29, 1998 26 1998–26 I.R.B.

1998–26 I.R.B. 27 June 29, 1998

June 29, 1998 28 1998–26 I.R.B.

1998–26 I.R.B. 29 June 29, 1998

June 29, 1998 30 1998–26 I.R.B.

1998–26 I.R.B. 31 June 29, 1998

June 29, 1998 32 1998–26 I.R.B.

1998–26 I.R.B. 33 June 29, 1998

June 29, 1998 34 1998–26 I.R.B.

1998–26 I.R.B. 35 June 29, 1998

cedure, this revenue procedure applies to the costs of a package design as defined in section 2 of this revenue procedure.

.02 Inapplicability. This revenue procedure does not apply to the costs of a package design that is an amortizable § 197 intangible as defined in § 197(c).

.07 Sections 5.01(2)(the capitalization method), 5.02(2)(the design-by-design capitalization and 60-month amortization method), and 5.03(2)(the pool-of-cost capitalization and 48-month amortization method) of Rev. Proc. 97–35 are modified to read as follows:

.01(2) Computation of basis. The basis of each package design (or modification to the design) subject to capitalization is determined by applying the provisions of § 263 and the regulations thereunder to costs incurred prior to January 1, 1987, or in taxable years beginning after December 31, 1993, and by applying the provisions of § 263A and the regulations thereunder to costs incurred after December 31, 1986, in taxable years beginning before January 1, 1994 (regardless of the tax year the design (or modification to the design) is placed in service). The costs required to be capitalized are described in section 2 of this revenue procedure.

.02(2) Computation of basis. Under the design-by-design capitalization and 60-month amortization method, the basis of each package design (or modification of the design) subject to capitalization must be determined by applying the provisions of § 263 and the regulations thereunder to costs incurred prior to January 1, 1987, or in taxable years beginning after December 31, 1993, and by applying the provisions of § 263A and the regulations thereunder to costs incurred after December 31, 1986, in taxable years beginning before January 1, 1994 (regardless of the tax year the design (or modification to the design) is placed in service). The costs required to be capitalized are described in section 2 of this revenue procedure.

.03(2) Costs subject to capitaliza- tion. All package design costs are subject to capitalization without regard to whether the costs create a package design (or modification to the design) having an ascertainable useful life that extends substantially beyond the end of the tax year in which the costs are incurred. Thus, all package design costs incurred prior to January 1, 1987, or in taxable years be

26 CFR 601.204: Changes in accounting periods and in methods of accounting. (Also Part I, sections 197, 263, 263A; 1.263A-2.)

Rev. Proc. 98–39