INCOME TAX

Rev. Rul. 2004–3, page 486. Service partnerships. This ruling provides guidance concerning the application of the U.S.-Germany income tax treaty to a nonresident partner in a service partnership that conducts activities in the United States. It makes clear that a nonresident partner is subject to U.S. income tax on his share of income from the partnership to the extent that such income is attributable to the partnership’s activities in the United States, without regard to whether the partner performs services in the United States. This ruling also applies to other U.S. income tax treaties that have the same or similar provisions as those in the U.S.-Germany treaty.

T.D. 9107, page 447. Final regulations under section 263(a) of the Code provide rules for applying section 263(a) to amounts paid to acquire or create intangibles. These regulations also provide rules for applying section 263(a) to amounts paid to facilitate the acquisition of a trade or business, a change in the capital structure of a business entity, and certain other transactions. In addition, these regulations provide safe harbor amortization under section 167(a) for certain intangibles and explain the manner in which taxpayers may deduct debt issuance costs.

Notice 2004–5, page 489. Pursuant to the authority granted under section 772(a)(11) of the Code, the Secretary has determined that it is appropriate for a partner of an electing large partnership to take into account separately the partner’s distributive share of the partnership’s dividends received that are qualified dividend income as defined in section 1(h)(11)(B). This requirement is effective for dividends received by a partnership after December 31, 2002.

Announcements of Disbarments and Suspensions begin on page 499. Finding Lists begin on page ii.