SECTION 2. BACKGROUND

Section 5 of Rev. Proc. 98–3 sets forth those areas under extensive study in which rulings or determination letters will not be issued until the Service resolves the issue through publication of a revenue ruling, revenue procedure, or otherwise. Section 631(a) of the Code provides that a taxpayer may elect to treat the cutting of certain timber as a sale or exchange of that timber. Sections 631(b) and (c) treat the specified gain or loss on the disposal of certain timber, coal, or domestic iron ore under a contract whereby the owner retains an economic interest in the property as though it were a gain or loss on the sale of such property. Section 1374 imposes a tax on the recognized built-in gains of an S corporation. The Service intends to study further whether § 1374 ap

plies to the situations described in section 3 of this revenue procedure.