Bulletin No. 2002–14 April 8, 2002

Notice 2002–21, page 730. This notice addresses a transaction generating tax losses based on an inflated basis in assets acquired from another party. The inflated basis is claimed as a result of a transfer of assets in which a taxpayer becomes jointly and severally liable on indebtedness of the transferor, with the indebtedness having a stated principal amount substantially in excess of the fair market value of the assets transferred. The notice states that the taxpayer’s basis in the assets transferred is equal to the fair market value of such assets upon their acquisition by the taxpayer rather than the stated principal amount of the indebtedness.

Rev. Proc. 2002–20, page 732. Guidance is provided to individuals who fail to meet the eligibility requirements of section 911(d)(1) of the Code because adverse conditions in a foreign country preclude the individual from meeting those requirements. A current list of countries and the dates those countries are subject to the section 911(d)(4) waiver is provided. Rev. Proc. 2001–27 supplemented.