Part IV. Items — Internal Revenue Bulletin 2004-20

Notice of Proposed Rulemaking by Cross-Reference to Temporary Regulations and Notice of Public Hearing

Partner’s Distributive Share: Foreign Tax Expenditures

REG–139792–02

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary regulations and notice of public hearing.

SUMMARY: This document contains proposed regulations relating to the proper allocation of partnership expenditures for foreign taxes. The proposed regulations affect partnerships and their partners. In this issue of the Bulletin, the IRS is issuing temporary regulations (T.D. 9121) that modify the rules relating to the proper allocation of creditable foreign taxes. The text of the temporary regulations also serves as the text of these proposed regulations. This document also contains a notice of public hearing on these proposed regulations.

DATES: Written or electronic comments must be received by Tuesday, August 24, 2004. Outlines of topics to be discussed at the public hearing scheduled for Tuesday, September 14, 2004, at 10 a.m., must be received by Tuesday, August 24, 2004.

ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG–139792–02), room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG–139792–02), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC. Alternatively, taxpayers may submit electronic comments directly to the IRS internet site at www.irs.gov/regs or www.regulations.gov . The public hearing

will be held in the Auditorium, Internal Revenue Building, 1111 Constitution Avenue, NW, Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Beverly M. Katz, (202) 622–3050; concerning submissions and the hearing, Treena Garrett, (202) 622–7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

The temporary regulations amend the rules in 26 CFR part 1 regarding the allocation of foreign taxes among partners under section 704(b). The text of the temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the regulation.

Special Analyses

It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because these regulations do not impose on small entities a collection of information requirement, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Therefore, a Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Internal Revenue Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

Comments and Public Hearing

Before these proposed regulations are adopted as final regulations, consideration will be given to any written (a signed original and eight (8) copies) or electronic comments that are submitted timely to the IRS. All comments will be available for public inspection and copying.

A public hearing has been scheduled for Tuesday, September 14, 2004, at 10 a.m. in the Auditorium, Internal Revenue Building, 1111 Constitution Avenue, NW, Washington, DC. Because of access restrictions, visitors will not be admitted beyond the immediate entrance area more than 30 minutes before the hearing starts. For information about having your name on the building access list to attend the hearing, see the FOR FURTHER INFORMATION CONTACT portion of this preamble. The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to present oral comments must submit written or electronic comments by Tuesday, August 24, 2004, and an outline of the topics to be discussed and the time to be devoted to each topic (a signed original and eight (8) copies) by Tuesday, August 24, 2004. A period of 10 minutes will be allotted to each person for making comments. An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be available free of charge at the hearing.

Drafting Information

The principal author of this regulation is Beverly M. Katz, Office of the Associate Chief Counsel (Passthroughs & Special Industries). However, other personnel from the IRS and Treasury Department participated in its development.

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Proposed Amendments to the Regulations

Accordingly, 26 CFR parts 1 and 301 are proposed to be amended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation for part 1 continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * * Par. 2. Section 1.704–1 is amended as follows:

Paragraphs (b)(1)(ii)( b ) and (b)(4)(xi) are added.
Paragraph (b)(5) is amended by adding Example 25 through Example 28 .

May 17, 2004 926 2004-20 I.R.B.

proper instructions to the broker. This rule allows identification without regard to the particular shares physically transferred by the broker. The rule also allows identification when several lots are represented by a single share certificate. However, if a shareholder holds a different share certificate for each lot, the identity of the shares is determined by the specific certificate sold.

Section 358(a)(1) generally provides that the basis of property received pursuant to an exchange to which section 351, 354, 355, 356, or 361 applies is the same as that of the property exchanged, decreased by the fair market value of any other property (except money) received by the taxpayer, the amount of any money received by the taxpayer, and the amount of loss to the taxpayer which was recognized on such exchange, and increased by the amount which was treated as a dividend, and the amount of gain to the taxpayer which was recognized on such exchange (not including any portion of such gain which was treated as a dividend). Section 358(b)(1) provides that, under regulations prescribed by the Secretary, the basis determined under section 358(a)(1) must be allocated among the properties received in the exchange or distribution.

Section 1.358–2(a)(2) provides that, if as the result of an exchange or distribution under section 354, 355, 356, or former 371(b) a shareholder who owned stock of only one class before the transaction owns stock of two or more classes after the transaction, then the basis of all the stock held before the transaction (as adjusted under §1.358–1) must be allocated among the stock of all classes (whether or not received in the transaction) held immediately after the transaction in proportion to the fair market values of the stock of each class. In addition, §1.358–2(a)(3) provides that, if as the result of an exchange under section 354, 355, 356, or former 371(b) a security holder who owned only securities, all of one class, before the transaction, owns securities or stock of more than one class, or owns both stock and securities, then the basis of all the securities held before the transaction (as adjusted under §1.358–1) must be allocated among all the stock and securities (whether or not received in the transaction) held immediately after the transaction in proportion to

The additions and revisions read as follows.

§1.704–1 Partner’s distributive share.

- - - (b) - - (1) - - (ii) * - ( b ) [The text of this proposed amendment is the same as the text of §1.704–1T(b)(1)(ii)( b ) published elsewhere in this issue of the Bulletin].
- - - (4) - - (xi) [The text of this proposed amendment is the same as the text of §1.704–1T(b)(4)(xi) published elsewhere in this issue of the Bulletin].
- - - (5) [The text of this proposed amendment of §1.704–1(b)(5) is the same as the text of §1.704–1T(b)(5) published elsewhere in this issue of the Bulletin].

John M. Dalrymple, Acting Deputy Commissioner for

Services and Enforcement .

(Filed by the Office of the Federal Register on April 20, 2004, 8:45 a.m., and published in the issue of the Federal Register for April 21, 2004, 69 F.R. 21454)

Notice of Proposed Rulemaking

Determination of Basis of Stock or Securities Received In Exchange for, or With Respect to, Stock or Securities in Certain Transactions

REG–116564–03

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking.

SUMMARY: This document contains proposed regulations under section 358 that provide guidance regarding the determination of the basis of stock or securities received in exchange for, or with respect to, stock or securities in certain transactions.

These proposed regulations affect shareholders of corporations.

DATES: Written or electronic comments must be received by July 2, 2004.

ADDRESSES: Send submissions to CC:PA:LPD:PR (REG–116564–03), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand delivered Monday through Friday between the hours of 8 am and 4 pm to: CC:PA:LPD:PR (REG–116564–03), Courier’s desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC 20044, or sent electronically, via the IRS Internet site at www.irs.gov/regs or via the Federal eRulemaking Portal at www.regulations.gov (indicate IRS and REG–116564–03).

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Theresa Kolish, Emidio J. Forlini, Jr. or Reginald Mombrun, (202) 622–7930, concerning submissions of comments, Treena Garrett, (202) 622–7180 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

Section 1012 of the Internal Revenue Code (Code) provides that the basis of property is generally the cost of such property. Section 1.1012–1(c) provides that, if shares of stock are sold or transferred by a taxpayer who purchased or acquired lots of stock on different dates or at different prices, and the lot from which the stock was sold or transferred cannot be adequately identified, the stock sold or transferred is charged against the earliest of such lots purchased or acquired in order to determine the basis of such stock.

Under this rule, a shareholder has greater flexibility in planning the tax consequences of the sale by specifically identifying the shares sold. The rules for adequate identification operate differently depending on the manner in which the shares are held and actions taken by the shareholder. For example, when shares are held through a broker, an adequate identification is effected by giving the

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acquiring or issuing corporation. That is, the exchanging shareholder will know that one or more shares of the acquiring or issuing corporation are being received in exchange for one or more shares of the target corporation. However, when the shareholder sells or transfers stock of the acquiring or issuing corporation, it may not know which share of stock of the target corporation corresponds to a particular share of the acquiring or issuing corporation. Although, in some cases, the exchange may present obstacles to physical tracing, these obstacles are not materially different from those that exist in the absence of a reorganization where shares are held through a broker or consolidated in a single certificate. Thus, the IRS and Treasury Department believe that it is appropriate to permit shareholders to identify the shares of the acquiring corporation sold or transferred by reference to the shares surrendered in exchange therefor.

These proposed regulations remove §1.358–2(a)(2) through (5) and (c) and replace these provisions with a more complete set of rules for determining the basis of each share or security received in a reorganization described in section 368 and a distribution to which section 355 applies. These proposed regulations generally provide that the basis of each share of stock or security received in an exchange to which section 354, 355, or 356 applies will be the same as the basis of the share or shares of stock or security or securities exchanged therefor. The determination of which share of stock or security is received in exchange for, or with respect to, a particular share of stock or security will be made in accordance with the terms of the exchange or distribution.

If more than one share of stock or security (or a combination of shares of stock and securities) is received in exchange for one share of stock or security, the basis of the share of stock or security surrendered will be allocated to the shares and/or securities received based on the fair market value of the shares and/or securities received. In addition, if one share of stock or security is received in respect of more than one share of stock or security or a fraction of a share of stock or security is received, the basis of the shares of stock or securities surrendered must be allocated to the shares of stock or securities received in a manner that, to the greatest extent possible, reflects

the fair market values of the stock of each class and the securities of each class.

Section 1.358–2(a)(4) provides that, in every case in which, before the transactions, a person owned stock of more than one class or securities of more than one class or owned both stock and securities, a determination must be made, upon the basis of all the facts, of the stock or securities received with respect to stock and securities of each class held (whether or not surrendered). The allocation described in §1.358–2(a)(2) is separately made as to the stock of each class with respect to which there is an exchange or distribution and the allocation described in §1.358–2(a)(3) is separately made with respect to the securities of each class, part or all of which are surrendered in the exchange.

Section 1.358–2(a)(5) provides a special rule that applies in cases in which a shareholder retains stock or securities pursuant to a plan of recapitalization under section 368(a)(1)(E). In those cases, the basis of the stock retained remains unchanged.

When all of the taxpayer’s stock in a target corporation is transferred in a reorganization in exchange for stock of the acquiring corporation or the issuing corporation, it may be difficult to identify physically which share of stock of the target corporation was surrendered for which share of stock of the acquiring or issuing corporation. Questions have arisen regarding whether, for purposes of section 1012 and the regulations thereunder, a shareholder that sells or transfers shares of stock received in an exchange or distribution to which section 354, 355, or 356 applies can identify that share as being traceable to a particular lot of exchanged shares and, if so, how such an identification can be effected.

A number of authorities have addressed this issue but have reached inconsistent results. For example, in Arrott v. Commis- sioner, 136 F.2d 449 (3d Cir. 1943), the court reasoned that the shares surrendered in an acquisitive reorganization lost their identity when traded for new shares in the reorganization and held that the basis of the shares acquired was determined by averaging the basis of the shares exchanged. Accord Commissioner v. Bolender, 82 F.2d 591 (7th Cir. 1936); Helvering v. Stifel, 75 F.2d 583 (4th Cir. 1935); Commissioner v. Von Gunten, 76 F.2d 670 (6th Cir. 1935);

see also Revenue Ruling 55–355, 1955–1 C.B. 418.

On the other hand, other courts have rejected the average basis method for determining the basis of stock received in a reorganization. For example, in Bloch v. Com- missioner, 148 F.2d 452 (9th Cir. 1945), the court permitted the basis of blocks of stock received in an acquisitive reorganization to be traced to the basis of the surrendered stock. The court reasoned that where the shareholder can trace the “transmigrations” of shares of stock, there is no reason the shareholder should not be entitled to identify which shares are sold. In Kraus v. Commissioner, 88 F.2d 616 (2d Cir. 1937), the court held that if a taxpayer acquires a corporation’s stock at different times and at different prices and exchanges that stock in a recapitalization, the bases of that stock are not blended or averaged in computing the basis of the acquired stock. See also Osrow v. Commissioner, 49 T.C. 333 (1968). The IRS and Treasury Department have considered whether tracing or averaging is the more appropriate method for determining the basis of stock received in a reorganization described in section 368 or a distribution to which section 355 applies. In view of the carryover basis rule of section 358, the IRS and Treasury are not convinced that a reorganization is an event that justifies averaging the bases of the exchanged blocks of stock. Moreover, the IRS and Treasury Department are concerned that averaging the bases of the exchanged blocks of stock may inappropriately limit the ability of taxpayers to arrange their affairs or may afford opportunities for the avoidance of certain provisions of the Code.

The authorities holding that the basis of shares received in a reorganization is determined by the average basis method have reached that conclusion on the basis that it is not possible to match shares received with shares surrendered. The IRS and Treasury Department do not believe that this inability requires the use of the average basis method. When stock of one corporation is surrendered in exchange for stock of another corporation in a reorganization, the documents governing the reorganization will typically identify how many, and what class of, shares of the target corporation are being exchanged for how many, and what class of, shares of the

May 17, 2004 928 2004-20 I.R.B.

regulations are published as final regulations in the Federal Register .

Effect on Other Documents

These proposed regulations would obsolete Revenue Ruling 55–355, 1955–1 C.B. 418, for transactions occurring after the date these regulations are published as final regulations in the Federal Register .

Special Analysis

It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C chapter 5) does not apply to these regulations, and, because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

Comments and Public Hearing

Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments (a signed original and eight copies) that are submitted timely to the IRS. Alternatively, taxpayers may submit comments electronically via the IRS Internet site at www.irs.gov/regs or via the Federal eRulemaking Portal at www.regulations.gov . The IRS and Treasury Department request comments on the clarity of the proposed rules and how they can be made easier to understand. All comments will be available for public inspection and copying. A public hearing may be scheduled if requested in writing by any person who timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place of the hearing will be published in the Federal Register .

Drafting Information

The principal authors of these regulations are Reginald Mombrun, Theresa Kolish, and Emidio J. Forlini, Jr. of the Office of the Associate Chief Counsel

that a share of stock or security received is received in respect of shares of stock or securities acquired on the same date and at the same price. Therefore, if a shareholder that acquired 2 shares of stock of a target corporation on Date 1 for $2 each and 2 shares of stock of the target corporation on Date 2 for $3 each and the shareholder exchanges such shares for 2 shares of the acquiring corporation, one share of the acquiring corporation will be treated as acquired for the shares of the target corporation acquired on Date 1 and the other share will be treated as acquired for the shares of the target corporation on Date 2. Accordingly, one share will have a basis of $4 and the other share will have a basis of $6. This rule avoids, to the greatest extent possible, creating shares or securities with split holding periods.

In the case of an exchange to which both section 351 and section 354 or section 356 applies, however, these rules do not apply if, in connection with the exchange, the shareholder or security holder also exchanges property for stock or securities in an exchange to which neither section 354 nor 356 applies or liabilities of the shareholder or security holder are assumed. This limitation on the application of these rules is intended to prevent a conflict between, on the one hand, those rules that apply to determine the basis of stock received in an exchange to which section 351 applies (including the effect of the application of section 357(c)) and, on the other hand, these proposed rules.

In the case of a distribution to which section 355 applies in connection with which there is no exchange of shares of stock or securities but only the receipt of additional shares of stock or securities, these proposed regulations provide that the basis of each share of stock or security of the distributing corporation is allocated between the share of stock or security of the distributing corporation and the share of stock or security received with respect to such share of stock or security of the distributing corporation in proportion to their fair market values. If one share of stock or security is received in respect of more than one share of stock or security or a fraction of a share of stock or security is received, the basis of each share of stock or security of the distributing corporation must be allocated to the shares of stock or securities received in a manner that re

flects that, to the greatest extent possible, a share of stock or security received is received in respect of shares of stock or securities acquired on the same date and at the same price.

The IRS and Treasury Department recognize that, in certain cases, the shareholder will not be able to identify which particular share (or portion of a share) of stock or security was exchanged for, or received with respect to, a particular share (or portion of a share) of stock or security. In these cases, the proposed regulations permit the shareholder or security holder to designate which share or security was received in exchange for, or in respect of, which share or security. Such designation, however, must be consistent with the terms of the exchange or distribution.

The designation must be made on or before the first date on which the basis of a share or security received is relevant, for example, the date on which a share or security received is sold or is transferred in an exchange described in section 351 or section 721 or a reorganization described in section 368. The designation is binding for purposes of determining the Federal tax consequences of subsequent transactions involving any share or security received or property received with respect to such share or security. If the shareholder fails to make a designation, then the shareholder will not be able to identify which shares are sold or transferred for purposes of determining the basis of property sold or transferred under section 1012 and §1.1012–1(c) and, instead, will be treated as selling or transferring the share received in respect of the earliest share purchased or acquired.

The current regulations under section 358 include references to transactions described in former sections 371(b) and 374, which were repealed by section 11801(a)(19) of Public Law 101–508 (104 Stat. 1388) effective November 5, 1990. To reflect the repeal of these sections, these proposed regulations remove the references to sections 371(b) and 374 as they currently appear in the regulations under section 358.

Effective Date

These regulations are proposed to apply to exchanges and distributions of stock or securities occurring after the date these

2004-20 I.R.B. 929 May 17, 2004

in an exchange under the terms of section 354, 355, or 356, the basis of each share of stock or security received in the exchange shall be the same as the basis of the allocable portion of the share or shares of stock or security or securities exchanged therefor (as adjusted under §1.358–1). If more than one share of stock or security is received in exchange for one share of stock or one security, the basis of the share of stock or security surrendered shall be allocated to the shares of stock or securities received in the exchange in proportion to the fair market value of the shares of stock or securities received. If one share of stock or security is received in respect of more than one share of stock or security or a fraction of a share of stock or security is received, the basis of the shares of stock or securities surrendered must be allocated to the shares of stock or securities received in a manner that reflects, to the greatest extent possible, that a share of stock or security received is received in respect of shares of stock or securities acquired on the same date and at the same price.

(ii) If a shareholder or security holder receives one or more shares of stock or one or more securities in a distribution under the terms of section 355 (or so much of section 356 as relates to section 355) and does not surrender any shares of stock or securities in connection with the distribution, the basis of each share of stock or security of the distributing corporation (as defined in §1.355–1(b)), as adjusted under §1.358–1, shall be allocated between the share of stock or security of the distributing corporation with respect to which the distribution is made and the share or shares of stock or security or securities (or allocable portions thereof) received with respect to the share of stock or security of the distributing corporation in proportion to their fair market values. If one share of stock or security is received in respect of more than one share of stock or security or a fraction of a share of stock or security is received, the basis of each share of stock or security of the distributing corporation must be allocated to the shares of stock or securities received in a manner that reflects that, to the greatest extent possible, a share of stock or security received is received in respect of shares of stock or securities acquired on the same date and at the same price.

(Corporate), IRS. However, other personnel from the IRS and the Treasury Department participated in their development.

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Proposed Amendments to the Regulations

Accordingly, 26 CFR part 1 is proposed to be amended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation for part 1 is amended by adding an entry in numerical order to read, in part, as follows:

Authority: 26 U.S.C. 7805 * * * Section 1.358–2 also issued under 26 U.S.C. 358. - * *

Par. 2. Section 1.358–1 is amended by:

Revising paragraph (a).
Adding paragraph (c). The revision and addition read as follows:

§1.358–1 Basis to distributees.

(a) In the case of an exchange or distribution to which section 354 or 355 applies in which, under the law applicable to the year in which the exchange is made, only nonrecognition property is received, the sum of the basis of all of the stock and securities in the corporation whose stock and securities are exchanged or with respect to which the distribution is made, held immediately after the transaction, plus the basis of all stock and securities received in the transaction shall be the same as the basis of all the stock and securities in such corporation held immediately before the transaction allocated in the manner described in §1.358–2. In the case of an exchange to which section 351 or 361 applies in which, under the law applicable to the year in which the exchange was made, only nonrecognition property is received, the basis of all the stock and securities received in the exchange shall be the same as the basis of all property exchanged therefor. If in an exchange or distribution to which section 351, 356, or 361 applies both nonrecognition property and “other property” are received, the basis of all the property except “other property” held after the transaction shall be determined as described in the preceding two sentences decreased by

the sum of the money and the fair market value of the “other property” (as of the date of the transaction) and increased by the sum of the amount treated as a dividend (if any) and the amount of the gain recognized on the exchange, but the term gain as here used does not include any portion of the recognized gain that was treated as a dividend. In any case in which a taxpayer transfers property with respect to which loss is recognized, such loss shall be reflected in determining the basis of the property received in the exchange. The basis of the “other property” is its fair market value as of the date of the transaction. See §1.460–4(k)(3)(iv)(A) for rules relating to stock basis adjustments required where a contract accounted for using a long-term contract method of accounting is transferred in a transaction described in section 351 or a reorganization described in section 368(a)(1)(D) with respect to which the requirements of section 355 (or so much of section 356 as relates to section 355) are met.

- - - (c) Effective date . Paragraph (a) of this section applies to exchanges or distributions of stock and securities after the date these regulations are published as final regulations in the Federal Register . Paragraph (b) of this section applies to exchanges or distributions of stock and securities after December 31, 1953.

Par. 3. Section 1.358–2 is amended by:

Revising paragraphs (a)(1) and (a)(2).
Removing paragraphs (a)(3), (a)(4), and (a)(5).
Revising paragraphs (b)(1) and (c).
Adding paragraph (d). The revisions and addition read as follows:

§1.358–2 Allocation of basis among nonrecognition property.

(a) Allocation of basis in exchanges or distributions to which section 354, 355, or 356 applies . (1) As used in this paragraph, the term stock means stock which is not “other property” under section 356. The term securities means securities (including, where appropriate, fractional parts of securities) which are not “other property” under section 356.

(2)(i) If a shareholder or security holder surrenders a share of stock or a security

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(iii) If a shareholder or security holder that purchased or acquired shares of stock or securities in a corporation on different dates or at different prices exchanges such shares of stock or securities under the terms of section 354, 355, or 356, or receives a distribution of shares of stock or securities under the terms of section 355, and the shareholder or security holder is not able to identify which particular share of stock or security (or portion of a share of stock or security) is received in exchange for, or with respect to, a particular share of stock or security, the shareholder or security holder may designate which share of stock or security is received in exchange for, or with respect to, a particular share of stock or security, provided that such designation is consistent with the terms of the exchange or distribution. The designation must be made on or before the first date on which the basis of a share of stock or security received is relevant. The basis of the shares or securities received, for example, is relevant when such shares or securities are sold or otherwise transferred. The designation will be binding for purposes of determining the Federal tax consequences of any sale or transfer of, or distribution with respect to, the shares or securities received. If the shareholder fails to make a designation, then the shareholder will not be able to identify which shares are sold or transferred for purposes of determining the basis of property sold or transferred under section 1012 and §1.1012–1(c) and, instead, will be treated as selling or transferring the share received in respect of the earliest share purchased or acquired.

(iv) Paragraphs (a)(2)(i) through (iii) of this section shall not apply to determine the basis of a share of stock or security received by a shareholder or security holder in an exchange described in both section 351 and section 354 or section 356, if, in connection with the exchange, the shareholder or security holder exchanges property for stock or securities in an exchange to which neither section 354 nor 356 applies or liabilities of the shareholder or security holder are assumed.

(b) Allocation of basis in exchanges to which section 351 or 361 applies . (1) As used in this paragraph (b), the term stock refers only to stock which is not “other property” under section 351 or 361 and the term securities refers only to securities

which are not “other property” under section 351 or 361.

- - - (c) Examples . The application of paragraphs (a) and (b) of this section is illustrated by the following examples:

Example 1 . (i) Facts . F, an individual, acquired 20 shares of Corporation N stock on Date 1 for $3 each and 10 shares of Corporation N stock on Date 2 for $6 each. On Date 3, Corporation O acquires the assets of Corporation N in a reorganization under section 368(a)(1)(A). Pursuant to the terms of the plan of reorganization, F receives 2 shares of Corporation O stock for each share of Corporation N stock. Therefore, F receives 60 shares of Corporation O stock. Pursuant to section 354, F recognizes no gain or loss on the exchange. F is not able to identify which shares of Corporation O stock are received in exchange for each share of Corporation N stock.

(ii) Analysis . Under paragraph (a)(2) of this section, F has 40 shares of Corporation O each of which has a basis of $1.50 and is treated as having been acquired on Date 1 and 20 shares of Corporation O each of which has a basis of $3 and is treated as having been acquired on Date 2. On or before the date on which the basis of a share of Corporation O stock received becomes relevant, F may designate which of the shares of Corporation O have a basis of $1.50 and which have a basis of $3.

Example 2 . (i) Facts . The facts are the same as in Example 1, except that instead of receiving 2 shares of Corporation O stock for each share of Corporation N stock, F receives 1 ¹ /2 shares of Corporation O stock for each share of Corporation N stock. Therefore, F receives 45 shares of Corporation O stock. Again, F is not able to identify which shares (or portions of shares) of Corporation O stock are received in exchange for each share of Corporation N stock.

(ii) Analysis . Under paragraph (a)(2) of this section, F has 30 shares of Corporation O each of which has a basis of $2 and is treated as having been acquired on Date 1 and 15 shares of Corporation O each of which has a basis of $4 and is treated as having been acquired on Date 2. On or before the date on which the basis of a share of Corporation O stock received becomes relevant, F may designate which of the shares of Corporation O have a basis of $2 and which have a basis of $4.

Example 3 . (i) Facts . E, an individual, purchased 20 shares of Class A stock of Corporation P on Date 1 for $3 per share and 10 shares of Class B stock of Corporation P on Date 2 for $3 per share. On Date 3, E exchanges each share of Class A stock for one share of new Class C stock and one share of new Class D stock in a reorganization under section 368(a)(1)(E). Pursuant to section 354, E recognizes no gain or loss on the exchange. On the date of the exchange, the fair market value of each share of Class A stock is $6, the fair market value of each share of Class C stock is $2, and the fair market value of each share of Class D stock is $4. E is not able to identify which shares of Class C and Class D stock of Corporation P are received in exchange for each share of Class A stock of Corporation P.

(ii) Analysis . Under paragraph (a)(2) of this section, because E receives one share of Class C stock and one share of Class D stock for each share of Class A stock, the basis of each share of Class A stock sur

rendered is allocated to one share of Class C stock and one share of Class D stock in proportion to their fair market values. Therefore, $1 of the basis of each share of Class A stock is allocated to each share of Class C stock and $2 of the basis of each share of Class A stock is allocated to each share of Class D stock. E’s basis in each share of Class B stock remains $3.

Example 4 . (i) Facts . G, an individual, purchased 10 shares of Corporation Q stock on Date 1 for $2 per share and 10 shares of Corporation Q stock on Date 2 for $5 per share. On Date 3, Corporation R acquires the stock of Corporation Q in a reorganization under section 368(a)(1)(B). Pursuant to the terms of the reorganization, G receives one share of Corporation R stock for every 2 shares of Corporation Q stock. Pursuant to section 354, G recognizes no gain or loss on the exchange. G is not able to identify which portion of each share of Corporation R stock is received in exchange for each share of Corporation Q stock.

(ii) Analysis . Under paragraph (a)(2) of this section, G has 5 shares of Corporation R each of which has a basis of $4 and is treated as having been acquired on Date 1 and 5 shares of Corporation R each of which has a basis of $10 and is treated as having been acquired on Date 2. On or before the date on which the basis of a share of Corporation R stock received becomes relevant, G may designate which of the shares of Corporation R have a basis of $4 and which have a basis of $10.

Example 5 . (i) Facts . The facts are the same as in Example 4, except that, in addition to transferring the stock of Corporation Q to Corporation R, G transfers land to Corporation R. In addition, after the transaction, G owns stock of Corporation R satisfying the requirements of section 368(c). G’s transfer of the Corporation Q stock to Corporation R is an exchange described in sections 351 and 354. G’s transfer of land to Corporation R is an exchange described in section 351. (ii) Analysis . Pursuant to paragraph (a)(2)(iv) of this section, because neither section 354 nor section 356 applies to the transfer of land to Corporation R, the rules of paragraphs (a)(2)(i) through (iii) of this section do not apply to determine G’s basis in the Corporation R stock received in the transaction.

Example 6 . (i) Facts . H, an individual, purchased 10 shares of Corporation T stock on Date 1 for $3 per share and 10 shares of Corporation T stock on Date 2 for $6 per share. On Date 3, Corporation V, a newly formed, wholly owned subsidiary of Corporation U, merges with and into Corporation T with Corporation T surviving. As part of the plan of merger, H receives one share of Corporation U stock for each share of Corporation T stock. In connection with the transaction, Corporation U assumes a liability of H. In addition, after the transaction, H owns stock of Corporation U satisfying the requirements of section 368(c). H’s transfer of the Corporation T stock to Corporation U is an exchange described in sections 351 and 354. (ii) Analysis . Pursuant to paragraph (a)(2)(iv) of this section, because, in connection with the transfer of the Corporation T stock to Corporation U, Corporation U assumed a liability of H, the rules of paragraphs (a)(2)(i) through (iii) of this section do not apply to determine H’s basis in the Corporation U stock received in the transaction.

2004-20 I.R.B. 931 May 17, 2004

Amani Christian Community

Development Corp., Pittsburgh, PA America Alevit Cultural Center, Inc.,

Brooklyn, NY Amherst Domestic Violence Task Force,

Inc., East Amherst, NY Anais Enterprises, Greensboro, NC Anshei Bnai Torah, Monsey, NY Arlington Golden Pride Band Booster,

Riverside, CA Art Sanctuary, Philadelphia, PA Art Works Studio School, Incorporated,

Washington, DC Atlanta Metropolitan Amateur Athletic

Club, Atlanta, GA Atlantic Chamber Orchestra, Portland, ME Ats Foundation, Inc., Paoli, PA Azimuth Education Foundation,

Lake Forest, CA Babylon Village Educational Foundation,

Inc., Babylon, NY Baltimore County Small Business

Resource Center, Inc., Towson, MD Banning Police Activities League, Inc.,

Banning, CA Barcare, Inc., Edison, NJ Beaver Girls Bantam Basketball Program,

Beaver, PA Bedford Girls Basketball, Bedford, IN Beginning With Books, Pittsburgh, PA Believers Community Outreach,

Los Angeles, CA Belleville Public Schools District

118 Educational Foundation, Ltd., Belleville, IL Bentley Hall Development Corporation,

Inc., Philadelphia, PA Beth Chinuch Soro Bohel, Inc.,

Brooklyn, NY Black Geeks Online, Washington, DC Black Men for Progress, Farrell, PA Black Swamp Arts Council, Archbold, OH Blacksburg Volunteer Fire Department,

Blacksburg, VA Bloomfield Amateur Boxing Association,

Inc., Bloomfield, CT Bloomington Activities Foundation,

Bloomington, MN Blue Ridge Education Fund, Inc.,

Roanoke, VA Blue Shift Theatre Ensemble, Boone, NC Blue Society of Center Pennsylvania,

Shermans Dale, PA Bobby Telfer Memorial Scholarship Fund,

Lansing, MI Books for Kids, Inc., Raleigh, NC Boyer Center for Education and Society,

Grantham, PA

Example 7 . (i) Facts . J, an individual, purchased 5 shares of Corporation X stock for $4 per share on Date 1 and 5 shares of Corporation X stock for $8 per share on Date 2. Corporation X owns all of the outstanding stock of Corporation Y. The fair market value of the stock of Corporation X, excluding the stock of Corporation Y, is $900. The fair market value of the stock of Corporation Y is $900. In a distribution to which section 355 applies, Corporation X distributes all of the stock of Corporation Y pro rata to its shareholders. No stock of Corporation X is surrendered in connection with the distribution. In the distribution, J receives 2 shares of Corporation Y stock with respect to each share of Corporation X stock. Pursuant to section 355, J recognizes no gain or loss on the receipt of the shares of Corporation Y stock. J is not able to identify which share of Corporation Y stock is received in respect of each share of Corporation X stock.

(ii) Analysis . Under paragraph (a)(2) of this section, because J receives 2 shares of Corporation Y stock with respect to each share of Corporation X stock, the basis of each share of Corporation X stock is allocated between such share of Corporation X stock and two shares of Corporation Y stock in proportion to the fair market value of those shares. Therefore, each of the 5 shares of Corporation X stock acquired on Date 1 will have a basis of $2 and each of the 10 shares of Corporation Y stock received with respect to those shares will have a basis of $1. In addition, each of the 5 shares of Corporation X stock acquired on Date 2 will have a basis of $4 and each of the 10 shares of Corporation Y stock received with respect to those shares will have a basis of $2. On or before the date on which the basis of a share of Corporation Y stock received becomes relevant, H may designate which of the shares of Corporation Y have a basis of $1 and which have a basis of $2.

(d) Effective date . This section applies to exchanges or distributions of stock and securities after the date these regulations are published as final regulations in the Federal Register .

Mark E. Matthews, Deputy Commissioner for Services and Enforcement .

(Filed by the Office of the Federal Register on April 20, 2004, 8:45 a.m., and published in the issue of the Federal Register for May 3, 2004, 69 F.R. 24107)

Foundations Status of Certain Organizations

Announcement 2004–36

The following organizations have failed to establish or have been unable to maintain their status as public charities or as operating foundations. Accordingly, grantors and contributors may not, after this date, rely on previous rulings or designations in the Cumulative List of Organizations

(Publication 78), or on the presumption arising from the filing of notices under section 508(b) of the Code. This listing does not indicate that the organizations have lost their status as organizations described in section 501(c)(3), eligible to receive deductible contributions.

Former Public Charities. The following organizations (which have been treated as organizations that are not private foundations described in section 509(a) of the Code) are now classified as private foundations:

1A Directors Champs Program, Inc., Southlake, TX 1st Lt. Alan Michael Hook Memorial Fund, Torrance, CA 3rd Power Foundation, Copiague, NY 1420 Foundation for Sustainable Development Education, Orlando, FL A. P. Hart Precious Moments Daycare,

East Orange, NJ Access New York, Inc., Jamaica, NY Actors Summit, Akron, OH Adolescent Health Alliance, Inc.,

New York, NY African American Childrens Theatre,

Ltd., Milwaukee, WI African American Health Initiative, Inc.,

Louisville, KY African American Males Making a

Difference, Charlottesville, VA African Diaspora Music and Art, Inc.,

New York, NY Ahepa 371 II, Inc., Detroit, MI Airlie Gardens Foundation, Inc.,

Wilmington, NC Aiun Foundation for International

Education and Democracy, Inc., Salem, OR Akron Newstead Youth Center, Inc.,

Akron, NY Al Horton Memorial Rotary Foundation,

Desert Hot Springs, CA Allegheny West Business Education

Foundation, Pittsburgh, PA Alliance Charitable Foundation, Inc.,

Amesbury, MA Alma Rangel Gardens Housing

Development Fund Company, Inc., New York, NY Alpha House Project, Inc., Duluth, GA Alternative Community Living Services,

Inc., Marietta, GA Alternative Medical Institute, Inc.,

Winsted, CT

May 17, 2004 932 2004-20 I.R.B.

Cross Connection Family Services,

Philadelphia, PA Cross High Band Booster, Cross, SC Dance Harrison Street, Inc., Easton, MD Decalogue Education Fund, Inc.,

Chicago, IL Depth Foundation, Inc., Northport, MI Diakonia Media Group, Inc.,

Duxbury, MA Dillsboro Tomorrow, Inc., Dillsboro, NC Dimensions Dance Company,

St. Louis, MO Disability Technologies, Inc.,

Hedgesville, WV District Heights Community Development

Corporation, District Heights, MD Dl Blades, Detroit Lakes, MN Doc Communications Media Group,

Somerset, NJ Downingtown Community Center, Inc.,

Downingtown, PA Downtown Senior Center, Inc.,

Scranton, PA Downtown Yonkers Management

Association, Inc., Yonker, NY Dressing to Succeed Licking County, Inc.,

Newark, OH Duanesburg Education Foundation, Inc.,

Duanesburg, NY Duneland Building Trades Corp.,

Chesterton, IN Dunkard Creek Watershed Assn., Inc.,

Morgantown, WV Durham Regional Financial Center,

Durham, NC Dusty Wings of the Desert, Inc.,

Palm Desert, CA Eagle Valley Senior Housing, Inc.,

Allentown, PA East End Business & Merchants Council,

Bridgeport, CT Eastfield Youth Activities, Nebo, NC Eastside Community Economic

Development Corporation, Charlotte, NC Eaton Area Senior Center, Inc.,

Charlotte, MI Eau Claire High School Foundation,

Chapin, SC Education Express Company, Howell, NJ Educational Foundation of Park Forest

Chicago Heights, Inc., Park Forest, IL Educational Netcasting Foundation, Inc.,

Cambridge, MA Ellwood City Education Foundation,

Ellwood City, PA Elvie Neighborhood Community

Association, Inc., Wilson, NC

Brea Olinda Wildcat Softball Boosters,

Brea, CA Brick City Soccer Club, Inc., Newark, NJ Briercrest Family of Schools USA

Foundation, Point Roberts, WA Buffalo Neighborhood Network, Inc.,

Buffalo, NY Bulgaria America Cultural Exchange,

Inc., Larchmont, NY California Condor Youth Wrestling,

Huntington, CA California Conservatory of Music,

Menlo Park, CA California Inland Region of Narcotics

Annonomous, Banning, CA Cal-Lee Retirement Villa, Inc.,

Southern Pines, NC Camden Urban Ministry Initiative, Inc.,

Camden, NJ Camp Cathedral School of the Arts, Inc.,

Atlanta, GA Capital Area Housing Resource Center,

Inc., Trenton, NJ Care Consulting Services, Inc.,

Frederick, MD Care Link Services, Lima, OH Caring Citizens for Action, Inc.,

La Mesa, CA Caritas of Yucaipa, Solana Beach, CA Carolina Christian Education Foundation,

Fayetteville, NC Carroll Elementary PTO, Inc.,

Shermans Dale, PA Celebration Christian Life Community,

Ridgewood, NJ Center for Natural Resources,

Stockton, MO Center in the City, Scranton, PA Central Park Towers, Inc., Kansas City, KS Central School District Foundation,

Park Hills, MO Century High School Model United

Nations Support Group, Santa Ana, CA Charity Childrens Home at Ebenezer,

N. Wilkesboro, NC Charleston Rotary Charitable Foundation,

Charleston, IL Chatham Cultural Center, Inc.,

Chatham, MA Cheltenham York Road Nursing

and Rehabilitation Center, Inc., Philadelphia, PA Child & Family Profile, Inc., Chicago, IL Child Assault Prevention of Ottawa

County, Port Clinton, OH Childrens Dance Theatre of Ashland,

Ashland, OR

Christian Learning Centers of the Upstate,

Easley, SC Christmas in April Topeka Shawnee Co.,

Inc., Topeka, KS Christmas in April West End Cities,

Ontario, CA Christs Mission, Marion, IL City of Orange Public Library Foundation,

Orange, CA Classical New Jersey Society, Inc.,

Plainfield, NJ Clayton Rotary Foundation, Inc.,

Clayton, GA Cleveland Center and Shelter,

Cleveland, OH Cleveland Foot and Ankle Clinic,

Cleveland, OH Cleveland Lumberjacks Charities, Inc.,

Cleveland, OH Clover Commons, Inc., Rock Hill, SC Coalition on Autism, Plains, PA Colesville Lions Foundation, Inc.,

Silver Spring, MD Colquitt Options, Albany, GA Columbia South Rotary Foundation,

Columbia, MO Commissioners Honor Camp Cadet, Inc.,

Hershey, PA Communities in School of Maryland, Inc.,

Baltimore, MD Communities in School of Prince Georges

County, Inc., Hyattsville, MD Community Builders of Durham, Inc.,

Durham, NC Community Connections, N. Platte, NE Community Enforcement Authority, Inc.,

Atlanta, GA Community Foundation of Mahoning

Valley, Youngstown, OH Community Technology Development,

Inc., Newton, MA Community Voices Collaborative

of the District of Columbia, Inc., Washington, DC Compassionate Outreach Ministries

Christian Academy, Inc., Winter Park, FL Connecticut Sports Institute Baseball

Association, Inc., Bridgeport, CT Consumer Benefits Work America

Program, Mount Holly, NJ Contextual Program Development

Foundation, Washington, DC Cook County Intervention, Oak Lawn, IL Costa Mesa Community Foundation,

Costa Mesa, CA Coventry High School Gridiron Club,

Inc., Coventry, CT

2004-20 I.R.B. 933 May 17, 2004

Greater Grand Forks Community Center

LLC, Grand Forks, ND Greater Hope Life Center, Inc.,

New York, NY Greater Options for Adolescent Lives,

Inc., Boston, MA Greater Philadelphia Cancer Foundation,

Philadelphia, PA Greater Southern Brooklyn Health

Coalition, Inc., Brooklyn, NY Greenville Chinese School,

Greenville, NC Greenwich Agora, Inc., Greenwich, CT Grosse Pointe South Choir Boosters, Inc.,

Grosse Pointe Farms, MI Hall-Light and Associates, Hampton, VA Hamilton County Self Help Housing,

Webster City, IA Hampden County Land Trust, Inc.,

Monson, MA Hand Craft Alliance, Waynesboro, VA Hands & Minds, Inc., Cambridge, MA Hands on Helpers, Inc., Princeton, NJ Happy Times Development Corporation,

Inc., Philadelphia, PA Harlem Renaissance Economic

Development Corporation, New York, NY Hartford Teen Center,

White River Junction, VT Hawaii Ola Waimanalo, Honolulu, HI Hawkeye East Wrestling Club, Inc.,

Christiansburg, VA Health, Incorporated, Sioux City, IA Heart and Soul Ministries, Inc.,

Altoona, PA Heartland Opera Theatre, Webb City, MO Hellas United Fc, Inc., Boston, MA Henry White Experimental Farm

Foundation, Belleville, IL Heritage Band Boosters, Monroeville, IN Herminia M. Roque Memorial Social

Service Center, Chicago, IL High Tech High Foundation,

San Diego, CA Hillel of Rockland County, Inc.,

Monsey, NY Hillside Business Association,

Duluth, MN Hinsdale South High School Foundation,

Darien, IL Hiram Foundation, Incorporated,

Long Beach, CA Hispanic National Law Enforcement

Association New York Chapter Foundation, New York, NY Historical Advancement Association,

Philadelphia, PA

Emmanuel Bible Institute, New York, NY Empire Theatre Co., Chicago, IL Enrichment and Training Center,

Black Mountain, NC E S P, Ltd., Dover, NH Essex County Educational Foundation,

Inc., W. Orange, NJ Essex Itv, Inc., Newark, NJ Evangelical Catholic, Inc., Columbus, WI Fair Housing for America, Riverside, CA Fair Lawn Association for Special

Education, Fair Lawn, NJ Fair Tide, Inc., Kittery, ME Family Art Studio, Inc., St. Louis, MO Family Depot, Inc., St. Louis, MO Family First, Hamden, CT Family Law and Policy Institute, Inc.,

Washington, DC Family Life Home Christian School

Independent Study Program, San Marcos, CA Family Preservation Program, Inc.,

Warm Springs, VA Family Support Network of Vance

Granville Franklin and Warren, Oxford, NC Family Support Systems, Pacifica, CA Fauna Communications Research

Institute, Hillsborough, NC Federacion De Organizaciones Mexicanas

En Nueva Inglaterra, Inc., Chelsea, MA Federal Enterprise Community of Buffalo,

Inc., Buffalo, NY First Flight, Inc., Sumter, SC First Night Pittsburgh, Inc., Pittsburgh, PA First Step Childcare & Preschool, Inc.,

Waterford Wks, NJ Flights for Humanity, Incorporated,

Littleton, MA Foundation for Charter Schools, Inc.,

Newark, NJ Foundation for the Advancement of

Sexual Equity, Long Beach, CA Foundation for United States Russian

Cultural Relations, Inc., Alexandria, VA Foundations Reach Youth, Richmond, VA F R A M E S, Flint, MI Franco Foundation, Inc.,

Silver Spring, MD Freedom Through Christ Ministry, Inc.,

Bloomington, IN Freehold Borough Educational

Foundation, Inc., Freehold, NJ Freehold Township Foundation for

Educational Excellence Incorporate, Freehold, NJ Friends of Cabot Woods, Inc.,

Newton, MA

Friends of Charlotte Advantage Charter

School, Inc., Charlotte, NC Friends of Clinton Youth and Family

Service Bureau, Inc., Clinton, CT Friends of College Wrestling, Inc.,

Grand Rapids, MI Friends of Everett Arena, Concord, NH Friends of Kalamazoo Advantage

Academy, Inc., Kalamazoo, MI Friends of Mountain History, Inc.,

Asheville, NC Friends of Octavio Paz Charter School,

Inc., Chicago, IL Friends of Poway High Foundation,

Poway, CA Friends of Rocky Mount Charter School,

Inc., Battleboro, NC Friends of Seacoast Hospice,

Portsmouth, NH Friends of the Public Library, Clive, IA Friends of the School, Inc., Portland, IN Friends of Wasatch Summit Counties

Childrens Justice Center, Park City, UT Friends of Worc, Inc., Lake Success, NY Friends of Wvon, Chicago, IL Friends Who Care, Inc., New York, NY Frontiers Journal, Inc., Rhinebeck, NY Gary Wheaton Memorial Tri State

Respiratory Clinics, Vincennes, IN Gateway Management Corporation,

Buffalo, NY GEM Recreation & Health Center,

Kill Devil Hills, NC Genesis Corporation, Thomasville, NC Geoffrey Lance Foundation for Spinal

Cord Injury Res and Support, Philadelphia, PA Georgia Institute for Community

Development and Outreach, Inc., Atlanta, GA Get the Message, Inc., Baltimore, MD Ghana Computer Literacy & Distant

Education, Incorporated, Chicago, IL Gilgal Development Corporation,

Plainfield, NJ Global Childrens Health & Environment

Fund, Washington, DC Global Education Foundation,

Alexandria, VA Golden Dogs Academy, Inc.,

Mount Vernon, OH Granite State Federation of Families, Inc.,

Manchester, NH Great Expectations Weight Loss Camp,

Inc., Oakville, CT Great Pond Foundation, Inc.,

Edgartown, MA

May 17, 2004 934 2004-20 I.R.B.

Managing Earths Resources, Inc.,

Beverly, MA Mars Hill Media, Minneapolis, MN Marthas Vineyard Touchdown Club,

Oak Bluffs, MA Massachusetts Mental Health Counselors

Association, Inc., Natick, MA McFarland Education Foundation,

McFarland, CA McPherson County Connections, Inc.,

McPherson, KS McPherson Junior Pups Basketball Club,

McPherson, KS Media Unit, Inc., Syracuse, NY Mediation Association of Northwest

Ohio, Toledo, OH Medway Youth Community Organization,

Inc., Medway, MA Mental Health Consumer Advocates of

Rhode Island, Inc., Providence, RI Mental Health Workers Without Borders

USA, Inc., New York, NY Merrimack Valley Regional Animal

Shelter, Inc., Newburyport, MA Merry Mixers, Inc., Marblehead, MA Metro Health Florida, Inc., Roswell, GA Metro Health Indiana II, Inc., Roswell, GA Metro Health Vermont, Inc., Roswell, GA Metro Universal Career Center, Inc.,

Lithonia, GA Millrace Playground Committee,

Millersville, MD Mission Twenty Eight Ninteen,

Medina, OH Missouri Centers for Independent Living,

Kansas City, MO Missouri Sports Development Office,

Inc., Saint Peters, MO Mobridge Family Resource Center,

Mobridge, SD Montgomery County Womens Fair

Committee, Inc., Rockville, MD Mountain Vista Advocates,

Apple Valley, CA Mountaineer Region of Narcotics

Anonymous, Morgantown, WV Mt. Olivet of Harlem Housing

Development, New York, NY Multi-Cultural Center, Chicago, IL Multiple Sclerosis Association of

America Gardens at Evesham, Inc., Cherry Hill, NJ Museum of the Americas Foundation,

Inc., Arlington, VA Music in the City, Inc., Kansas City, MO Music Outreach Program,

Washington, DC

Hoffman Estates Park District Foundation,

Hoffman Estates, IL Holy Care, Inc., Lanham, MD Holy Cross Neighborhood Development,

Inc., Pittsburgh, PA Home of Hope Learning and Resource

Center, Inc., Hinesville, GA Homegrown, Inc., Brockton, MA Hope & Help, Inc., Brooklyn, NY Hope and New Dreams of Adelphi, Inc.,

Adelphi, MD H O P E Initiatives, Inc., Heralding

Opportunities Potentials Education, Macon, GA Housing Opportunities Made Economical,

Inc., Fredericksburg, VA Human Family Foundation,

Annandale, VA Humanist Ministries, Inc., Milwaukee, WI Hunter College High School

Chinese Parents Association, Inc., New York, NY Huntsville Bible Students, Huntsville, AL I Vote Project, Inc., Wilmington, DE Ice Dogs Hockey Club,

Dearborn Heights, MI Independence Empowerment Center, Inc.,

Manassas, VA Independent Tech Alumni Council, Inc.,

Boston, MA Indo-Pacific Conservation Alliance,

Washington, DC Infinities Chamber Ensemble, Inc.,

Kensington, NH Innerchange Freedom Initiative,

Washington, DC Intelliport Corporation, Chillicothe, OH International Centre for Eyecare

Education Foundation, So. San Francisco, CA International Concerned Friends

and Family of Mumia Abu Jamal, Philadelphia, PA International Housing & Family Services

Corp., Thousand Oaks, CA International Society for Craniofacial

Surgery, Philadelphia, PA Interscholastic Athletic Association of

Maryland, Inc., Baltimore, MD Ivan Pravilov Dainius Zubrus Hockey

Club and School, Mounds View, MN Jersey Knights, E. Brunswick, NJ JHS Boys Soccer Boosters,

Shepherdstown, WV JHS Girls Soccer Boosters,

Harpers Ferry, WV Jocobus Academy Group Home, Inc.,

Baltimore, MD

Jones College Scholarship Fund,

Charlotte, NC Kemper Military School and Endowment,

Inc., Boonville, MO Key Works Association, Chicago, IL Kings Highway, Inc., Mt. Holly, NJ Kuntu Repertory Theatre, Pittsburgh, PA Kutag, Kankakee, IL KVMH Charitable Foundation, Inc.,

Waimea, HI La Quinta High School Foundation,

La Quinta, CA Laguna Hills High School Friends

of Model United Nations, Laguna Hills, CA Lake City Education Foundation,

Lake City, MN Lakeview Parent Teacher Council,

Warsaw, IN Lakeville Performing Arts, Lakeville, MN Lakewood Community Mediation Center,

Inc., Lakewood, NJ Lakewood Redevelopment Corp.,

Atlanta, GA Lapiedra Family Firefighters Memorial

Fund, Staten Island, NY Leadership Akron, Akron, OH Leaven Center, Eden Prairie, MN Lebanon Riverside NH Rotary Charities,

Inc., West Lebanon, NH Lesc House Housing Development Fund

Corp., New York, NY Lexington Area Economic Development

Corporation, Lexington, MO Libertyville Hockey Club Organization,

Incorporated, Libertyville, IL Library Foundation of Madison County,

Inc., Canton, MS Life Long Learning Group, Matthews, NC Lincoln Park Elementary School PTO,

Lincoln Park, NJ Liverpool High School Student Activities,

Liverpool, NY Living Letters Ministries, Inc.,

St. Louis, MO Love Is, Incorporated, Ontario, CA Loving Hands, Inc., South Bend, IN Low Country Artists and Artisans Society,

Savannah, GA Lutheran Social Services of Central Ohio

Mansfield Housing, Inc., Columbus, OH Mahwah Ramapo Ridge Home and

School Organization, Inc., Mahwah, NJ Main Line Academy of Music, Inc.,

Ardmore, PA Maine Rural Network, Standish, ME Make It Happen Foundation, Inc.,

Atlanta, GA

2004-20 I.R.B. 935 May 17, 2004

Pleasants County Humane Society, Inc.,

Saint Marys, WV Portage County Culture Festival, Inc.,

Stevens Point, WI Portuguese Cultural Center, Inc.,

Danbury, CT Professional Reading Outreach, Inc.,

Falls Church, VA Progress in Education, Contoocook, NH Project Freedom, Inc., Boston, MA Project on African American International

Law, Chicago, IL Project Success of Decatur and Macon

County, Decatur, IL Prokids Athletic League, Inc., Atlanta, GA Prosthetic Abilities Center of Excellence,

San Diego, CA Providers Caring for Kids, Inc.,

New York, NY Psalms Foundation, Inc., Annapolis, MD PTA-PTO Thrift Shop, Inc.,

Lynchburg, VA Radio Maria, Inc., Landsdale, PA Raise the Bar, Inc., Stamford, CT Rallying Against Drugs Association,

Rialto, CA Reaching Children for God, Inc.,

Maineville, OH Rebuilding Together Bergen County, Inc.,

Ridgewood, NJ Recovery Plus II, Inc., Chicago, IL Red Devil Wrestling Club, Inc.,

Lowell, IN Refreshing Waters for Life Ministry, Inc.,

Attica, NY Region 15 Education Foundation, Inc.,

Middlebury, CT Response International, King George, VA RHA Affordable Housing IV, Inc.,

Atlanta, GA RHS Spirit Squad Booster, Ramona, CA Ring of Fire Productions, Inc.,

Brooklyn, NY Rio Rancho Astronomical Society, Inc.,

Rio Rancho, NM Riverside Community Foundation,

Incorporated, Washington, IA Riverwatch Association, Mineola, NY Riverworks a Creative Center, Inc.,

Dobbs Ferry, NY RMP Ministries, Inc., Charlotte, NC Robert C. Hill Elementary PTO,

Romeoville, IL R O C H Foundation, Inc., Durham, NC Rockwell Swaledale Education

Foundation, Charles City, IA Ross Camper Brunson Family Services,

Baltimore, MD

Naim Frasheri School of Madison, Inc.,

Middleton, WI National Institute for Prostate &

Urological Research, Chicago, IL National Organization for Children, Inc.,

Morrisville, PA Native American Medicine Persons

Association, Maple Grove, MN Native American Society for Historical

Preservation, Inc., Hessel, MI Near South Family Life Center

Collaborative, Inc., Chicago, IL Neighborhoods Incorporated of Hammond

Indiana, Hammond, IN Neil J. Brassell Jr, Foundation for Youth

Development, Bensalem, PA New Bern Family Resources, Inc.,

New Bern, NC New Creation Community Development

Corporation, Reading, PA New Day Development Corporation,

Kansas City, MO New Jersey Association of Child Care

Resource and Referral Agencies, Pennington, NJ New Life Community Services,

Philadelphia, PA New Life Multi Cultural Family

Community Center, Inc., Brockton, MA New Light Family Life & Educational

Center, Richmond, VA New Sudanese Association of Oregon,

Portland, OR New York City Center for Urban Wildlife

Rehabilitation, New York, NY New York State Association for Women in

Administration, Inc., Baldwinsville, NY Newton County Help Center, Neosho, MO Nimrod Project, Highland Park, MI Noahs Ark a Safe Place, Inc.,

Washington, PA Non-Profit Alliance Center for Leadership

Development, Inc., Dorchester, MA Nonquit Street Neighborhood Association

and Land Trust, Inc., Dorchester, MA North Andover Coalition Against Risky

Behavior, Inc., North Andover, MA North Carolina Amateur Wrestling

Association, Mooresville, NC North Carolina Family Resource

Coalition, Swannanoa, NC North Carolina Shore and Beach

Preservation Association, Inc., Oak Island, NC North Crown Heights Nostrand

Ave. Merchants Association, Inc., Brooklyn, NY

North Hero Education Foundation, Inc.,

North Hero, VT Northborough Education Foundation,

Inc., Northborough, MA Northeastern Pennsylvania Diversity

Education Consortium, Dallas, PA Northfield Community School

Organization, Inc., Northfield, VT Northmont Future Bolts Basketball,

Dayton, OH Northmont Traveling Baseball,

Dayton, OH Northside Norfolk Rotary Foundation,

Norfolk, VA Northview Choral Music Organization,

Sylvania, OH Oak Grove Parent Teacher Organization,

Green Oaks, IL OCPM Research Foundation,

Cleveland, OH Old Silver Spring House Tour Association,

Inc., Silver Spring, MD Omega First, Incorporated, Charlotte, NC Omicron Zeta Charitable and Educational

Fund, Inc., Raleigh, NC Orange County Health Research Alliance,

Santa Ana, CA Orange County Scholastic Foundation,

Irvine, CA Our Town Civic Organization, Inc.,

Westminster, VT Overture Theatre Corp., Woodbury, NY Paddle Providence, Inc., Providence, RI Panther Partners, Inc., Vista, CA Parents Advocating Challenging

Education, Saint Charles, MO Parents Coalition for Literacy, Inc.,

Richmond, IN Partners With Parents, Inc.,

Los Angeles, CA Pathways Retreat & Education Center,

Madison, VA Patrick Marsh Parent Student Teacher

Organization, Sun Prairie, WI Peaks at Raleigh, Inc., Asheville, NC People are Surviving Today, Gallatin, TN Perennial Garden Club, Washington, DC Peter V. Destephano Foundation for

Budd Chiari Syndrome Research, Lombard, IL Pieces, Inc., Saint Charles, MO Piedmont Bioethics Network,

High Point, NC Pikesville High School Music Boosters,

Inc., Baltimore, MD Pinecrest School Parent Council,

East Lansing, MI Place of Our Own, Inc., Baltimore, MD

May 17, 2004 936 2004-20 I.R.B.

Upper Iowa Audubon Society, Cresco, IA Upper Neuse River Basin Association,

Inc., Rtp, NC Urban Bankers Coalition Foundation,

Inc., New York, NY Valerius Parent Teacher Organization,

Urbandale, IA Vance Housing, Inc., Beckley, WV Vermont Student Opportunity Scholarship

Fund, Williston, VT Vickery Crek Middle School PTO,

Cumming, GA Villa Farnese, Philadelphia, PA Voices That Listen, Oaklawn, IL Wall Watchers, Matthews, NC Watertown Boosters Association,

Watertown, MA Waterville Valley Music Center,

New York, NY Wayne County Enrichment & Fitness

Center, Goldsboro, NC Wells Sports Complex, Inc., Escanaba, MI West Side 2000, Chicago, IL West Virginia Center for Civic Life, Inc.,

Charleston, WV Western Catarba County Family Resource

Center, Inc., Newton, NC Western Maryland YMCA Services

Corporation, Cumberland, MD Western North Carolina Safety & Fire

Education Assn., Weaverville, NC Westfield United Soccer Club, Inc.,

Westfield, MA Weston Education Foundation, Inc.,

Weston, VT Whaling City Rowing Club,

New Bedford, MA Whitehall Coplay Class Memorial

Scholarship Foundation, Inc., Whitehall, PA Wide Sky Theatre Company, Inc.,

New York, NY Williamsburg Film Festival, Inc.,

Toano, VA Wilmington Education Fund, Inc.,

Wilmington, VT Window of Hope Community Services,

Incorporated, Berkeley, IL Windsor Healing Centre, Incorporated,

Catlett, VA Wiscupa, Inc., Oshkosh, WI Women of NU, Chicago, IL Womens Business Institute, Inc.,

Tustin, CA Womens Social Impact Workshop, Inc.,

Philadelphia, PA Wood Ridge High School Band Parents

Association, Wood-Ridge, NJ

Rotary Club of Marthas Vineyard

Charitable Foundation, Inc., W. Yarmouth, MA Rotary Club of Northport New York

Charity Fd, Inc., Northport, NY Rotary Club of Temecula Foundation,

Murrieta, CA Rotary Healthy Youth Foundation,

Roseville, MN Roxborough Education Foundation, Inc.,

Philadelphia, PA Russian American Voters Educational

League, Inc., Richmond Hill, NY Safe Harbor Community Services, Inc.,

Manchester, NH San Diego Cultural Arts Alliance,

San Diego, CA San Diego National and International

Black Film Festival, San Diego, CA Sandra Starr Foundation, Princeton, NJ S. E. Gross School Parent Teacher

Organization, Brookfield, IL Sea Girt P A R K S, Inc., Sea Girt, NJ Second Chance Services Unlimited, Inc.,

Randallstown, MD Self Foundation, Philadelphia, PA Self Training Institute, Philadelphia, PA Servant Missions Unlimited, Inc.,

Roswell, GA Seymour Basketball Fan Club, Inc.,

Seymour, IN Shades of Strength, Pacifica, CA Sleepy Eye Area Home Health, Inc.,

Eden Prairie, MN Smart Start Day Care, Inc., Monett, MO Social Lites Scholarship Fund, Rialto, CA Society for the Education and Eradication

of Depression, Inc., Robbinsville, NJ Society of Many Faces, Inc.,

Brooklyn, NY Sonrise Development Corporation,

Englewood, NJ South Atlanta Redevelopment

Corporation, Atlanta, GA South Jersey Opportunities

Industrializations Centers, Inc., Camden, NJ South Memphis Youth Initiative, Inc.,

Memphis, TN Sparks Family of Edutainment Media,

Inc., Silver Spring, MD Special Services Home & School

Association, Inc., Ridgewood, NJ Spring Hope Elementary School Parent

Teacher Organization, Spring Hope, NC Springfield Peer Lending, Inc.,

Springfield, MA St. Anthony Homes, Inc., Bel Air, MD

St. James Park Day Care, Inc., Bronx, NY Stanly Net, Albemarle, NC Steelville Community Development and

Care Corporation, Salem, MO Stepping Stone Community Theater,

Shrewsbury, MA Stone Mountain Charter School, Inc.,

Stone Mountain, GA Story County Child Abuse Council,

Ames, IA Street Talk, Glencoe, IL Student Outreach Program, Inc.,

Wilton, CT Substance Awareness Greater Anderson

Coalition, Cincinnati, OH Sudanese Development Initiative, Inc.,

Palm Beach, FL Support Education and Research

for Chronic Hepatitis C, Inc., Jamaica Plain, MA Synergy Residential Academy,

Minneapolis, MN Tarheel Community Development

Corporation, New Bern, NC Team Thunder Wheelchair Sports,

Willow Wood, OH Tebucky Jones Youth Foundation,

New Britain, CT Ted Williams Housing Corporation,

Oceanside, CA Teen Rap, Jackson, MI Teens Taking Charge, Inc., Atlanta, GA Timeless Charities, Inc., Morris Plains, NJ TINC Road School Parent Teachers

Organization, Inc., Flanders, NJ Toms River Community Foundation, Inc.,

Toms River, NJ Torrance Mission Health Center,

Torrance, CA Tramway Elementary PTO, Inc.,

Sanford, NC Trans Action San Diego, San Jose, CA Transitional Services, Inc.,

St. Michaels, MD Tri Star Employee Development Corp.,

San Antonio, TX Trilogy Fleming of Topeka KS, Inc.,

Scottsdale, AZ True Hens, Inc., Wilmington, DE Typical Life Corporation, Mount Wolf, PA United Clayton Area Network for Youth,

Inc., Clayton, NC Unity Center, Snow Hill, NC University City Community Development,

Charlotte, NC University of Cincinnati, Cincinnati, OH Upaya Institute, Incorporated,

New York, NY

2004-20 I.R.B. 937 May 17, 2004

vided in section 1.509(a)–7 of the Income Tax Regulations. It is not the practice of the Service to announce such revised classification of foundation status in the Internal Revenue Bulletin.

Woodcliff Lake PFA, Inc., Woodcliff, NJ Woodcock Foundation, Inc.,

Baltimore, MD Woodland Park Middle School Music

Booster Club, San Marcos, CA Yes Youth Outreach, Inc., Omaha, NE Young Equestrians Program,

Plymouth, MN Youth Force, Inc., Bronx, NY

If an organization listed above submits information that warrants the renewal of its classification as a public charity or as a private operating foundation, the Internal Revenue Service will issue a ruling or determination letter with the revised classification as to foundation status. Grantors and contributors may thereafter rely upon such ruling or determination letter as pro

May 17, 2004 938 2004-20 I.R.B.