Bulletin No. 2001–3 January 16, 2001

REG–107566–00, page 346. Proposed regulations under section 355(e) of the Code generally require corporations to recognize gain on certain distributions of stock or securities of a subsidiary corporation if the distribution is part of a plan that also involves the acquisition by one or more persons of a 50 percent or greater interest in the corporation making the distribution or the corporation being distributed. A public hearing is scheduled for May 15, 2001.

Notice 2001–5, page 327. This notice provides guidance to partnerships regarding the need for both the terminated partnership and the new partnership to file a final short-year partnership tax return following a partnership termination under section 708(b)(1)(B) of the Code.

Notice 2001–12, page 328. Cost-of-living adjustments for 2001. This notice clarifies Rev. Proc. 2001–13, on page 337 of this Bulletin, to provide that the inflation-adjustment amounts set forth in Part I of section 3 of that revenue procedure are the applicable amounts for 2001 in accordance with the recently enacted legislation. Rev. Proc. 2001–13 clarified.

Rev. Proc. 2001–12, page 335. This procedure details safe harbor conditions under which the transfer of a REMIC noneconomic residual interest or FASIT ownership interest is presumed to be accomplished without an intention to impede the assessment or collection of tax. Taxpayers may rely on the safe harbors from February 4, 2000 (the date proposed regulations were filed with the Federal Register), until the date specified in future published guidance.

(Continued on the next page)

Rev. Proc. 2001–13, page 337. Cost-of-living adjustments for 2001. This procedure provides cost-of-living adjustments for the tax rate tables for individuals, estates, and trusts, the standard deduction amounts, the personal exemption, and several other items that use the adjustment method provided for the tax rate tables. The Service also provides the adjustment for eligible long-term care premiums and another item that uses the adjustment method provided for eligible long-term care premiums. Also, see Notice 2001–12, page 328 of this Bulletin, for a determination of the applicable inflation-adjustment amounts for 2001.

Rev. Proc. 2001–14, page 343. This procedure sets forth the maximum face amount of qualified zone academy bonds that may be issued by each State, the District of Columbia, and the possessions of the United States during 2001.