Part I. Rulings — Internal Revenue Bulletin 2004-44

Section 42.—Low-Income Housing Credit

Low-income housing credit; satisfac- tory bond; “bond factor” amounts for the period January through December 2004. This ruling announces the monthly bond factor amounts to be used by taxpayers who dispose of qualified low-income buildings or interests therein during the period January through December 2004.

Rev. Rul. 2004–100

In Rev. Rul. 90–60, 1990–2 C.B. 3, the Internal Revenue Service provided

guidance to taxpayers concerning the general methodology used by the Treasury Department in computing the bond factor amounts used in calculating the amount of bond considered satisfactory by the Secretary under § 42(j)(6) of the Internal Revenue Code. It further announced that the Secretary would publish in the Internal Revenue Bulletin a table of bond factor amounts for dispositions occurring during each calendar month.

Rev. Proc. 99–11, 1999–1 C.B. 275, established a collateral program as an alternative to providing a surety bond for taxpayers to avoid or defer recapture of the low-income housing tax credits under § 42(j)(6). Under this program, taxpayers

may establish a Treasury Direct Account and pledge certain United States Treasury securities to the Internal Revenue Service as security.

This revenue ruling provides in Table 1 the bond factor amounts for calculating the amount of bond considered satisfactory under § 42(j)(6) or the amount of United States Treasury securities to pledge in a Treasury Direct Account under Rev. Proc. 99–11 for dispositions of qualified low-income buildings or interests therein during the period January through December 2004.

Table 1 Rev. Rul. 2004–100 Monthly Bond Factor Amounts for Dispositions Expressed As a Percentage of Total Credits
	Calendar Year Building Placed in Service or, if Section 42(f)(1) Election Was Made, the Succeeding Calendar Year
Month of Disposition	1990	1991	1992	1993	1994	1995	1996	1997	1998	1999	2000
Jan ’04 Feb ’04 Mar ’04 Apr ’04 May ’04 Jun ’04 Jul ’04 Aug ’04 Sep ’04 Oct ’04 Nov ’04 Dec ’04	14.71 14.71 14.71 15.55 15.55 15.55 14.75 14.75 14.75 15.52 15.52 15.52	27.31 27.31 27.31 28.88 28.88 28.88 27.38 27.38 27.38 28.81 28.81 28.81	38.15 38.15 38.15 40.34 40.34 40.34 38.24 38.24 38.24 40.24 40.24 40.24	47.40 47.40 47.40 50.12 50.12 50.12 47.52 47.52 47.52 50.00 50.00 50.00	55.27 55.27 55.27 58.45 58.45 58.45 55.41 55.41 55.41 58.30 58.30 58.30	54.52 54.40 54.28 57.84 57.71 57.59 53.96 53.85 53.75 56.99 56.88 56.77	54.00 53.89 53.77 57.87 57.75 57.63 53.46 53.36 53.26 57.04 56.93 56.83	53.57 53.45 53.34 57.99 57.87 57.75 53.05 52.95 52.86 57.18 57.08 56.97	53.27 53.16 53.05 58.25 58.13 58.02 52.78 52.68 52.59 57.46 57.37 57.27	53.01 52.91 52.81 58.56 58.45 58.34 52.56 52.47 52.38 57.82 57.72 57.64	52.84 52.74 52.65 58.98 58.87 58.77 52.43 52.35 52.27 58.28 58.19 58.11

2004–44 I.R.B. 718 November 1, 2004

Table 1 (cont’d) Rev. Rul. 2004–100 Monthly Bond Factor Amounts for Dispositions Expressed As a Percentage of Total Credits
	Calendar Year Building Placed in Service or, if Section 42(f)(1) Election Was Made, the Succeeding Calendar Year
Month of Disposition	2001	2002	2003	2004
Jan ’04 Feb ’04 Mar ’04 Apr ’04 May ’04 Jun ’04 Jul ’04 Aug ’04 Sep ’04 Oct ’04 Nov ’04 Dec ’04	52.99 52.90 52.81 59.74 59.64 59.55 52.61 52.54 52.47 59.08 59.01 58.94	53.40 53.30 53.22 60.79 60.69 60.59 53.03 52.97 52.91 60.16 60.10 60.04	54.02 53.92 53.83 62.04 61.93 61.84 53.64 53.59 53.54 61.46 61.40 61.36	54.15 54.15 54.15 62.68 62.68 62.68 54.15 54.15 54.15 62.68 62.68 62.68

For a list of bond factor amounts applicable to dispositions occurring during other calendar years, see: Rev. Rul. 98–3, 1998–1 C.B. 248; Rev. Rul. 2001–2, 2001–1 C.B. 255; Rev. Rul. 2001–53, 2001–2 C.B. 488; Rev. Rul. 2002–72, 2002–2 C.B. 759; and Rev. Rul. 2003–117, 2003–46 I.R.B. 1051.

DRAFTING INFORMATION

The principal author of this revenue ruling is David McDonnell of the Office of Associate Chief Counsel (Passthroughs and Special Industries). For further information regarding this revenue ruling, contact Mr. McDonnell at (202) 622–3040 (not a toll-free call).

Section 472.—Last-in, First-out Inventories

26 CFR 1.472–1: Last-in, first-out inventories.

LIFO; price indexes; department stores. The August 2004 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, August 31, 2004.

Rev. Rul. 2004–101

The following Department Store Inventory Price Indexes for August 2004 were issued by the Bureau of Labor Statistics.

The indexes are accepted by the Internal Revenue Service, under § 1.472–1(k) of the Income Tax Regulations and Rev. Proc. 86–46, 1986–2 C.B. 739, for appropriate application to inventories of department stores employing the retail inventory and last-in, first-out inventory methods for tax years ended on, or with reference to, August 31, 2004.

The Department Store Inventory Price Indexes are prepared on a national basis and include (a) 23 major groups of departments, (b) three special combinations of the major groups - soft goods, durable goods, and miscellaneous goods, and (c) a store total, which covers all departments, including some not listed separately, except for the following: candy, food, liquor, tobacco, and contract departments.

November 1, 2004 719 2004–44 I.R.B.

BUREAU OF LABOR STATISTICS, DEPARTMENT STORE INVENTORY PRICE INDEXES BY DEPARTMENT GROUPS

(January 1941 = 100, unless otherwise noted)

Groups Aug. 2003 Aug. 2004

Percent Change from Aug. 2003

to Aug. 2004 ¹

Piece Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 488.9 513.2 5.0
Domestics and Draperies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 568.7 525.7 -7.6
Women’s and Children’s Shoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 631.4 623.7 -1.2
Men’s Shoes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 838.8 838.6 0.0
Infants’ Wear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 589.1 561.1 -4.8
Women’s Underwear. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 510.7 502.4 -1.6
Women’s Hosiery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347.8 337.5 -3.0
Women’s and Girls’ Accessories . . . . . . . . . . . . . . . . . . . . . . . . . . . 551.0 557.2 1.1
Women’s Outerwear and Girls’ Wear . . . . . . . . . . . . . . . . . . . . . . . 350.2 341.4 -2.5
Men’s Clothing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 528.7 524.4 -0.8
Men’s Furnishings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565.6 564.3 -0.2
Boys’ Clothing and Furnishings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423.3 414.5 -2.1
Jewelry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 880.6 902.5 2.5
Notions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 787.1 794.8 1.0
Toilet Articles and Drugs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 979.8 992.7 1.3
Furniture and Bedding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 619.8 607.8 -1.9
Floor Coverings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 588.7 581.5 -1.2
Housewares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 720.4 709.6 -1.5
Major Appliances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209.7 196.9 -6.1
Radio and Television. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.0 41.2 -8.4
Recreation and Education ² . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82.3 80.1 -2.7
Home Improvements ² . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124.2 129.2 4.0
Automotive Accessories ² . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111.7 112.8 1.0

Groups 1–15: Soft Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 553.5 546.4 -1.3 Groups 16–20: Durable Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392.1 379.2 -3.3 Groups 21–23: Misc. Goods ² . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93.8 93.1 -0.7

Store Total ³ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495.2 487.1 -1.6

1Absence of a minus sign before the percentage change in this column signifies a price increase. 2Indexes on a January 1986 = 100 base. 3The store total index covers all departments, including some not listed separately, except for the following: candy, food, liquor, tobacco and contract departments.

DRAFTING INFORMATION

The principal author of this revenue ruling is Michael Burkom of the Office of Associate Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact Mr. Burkom at (202) 622–7924 (not a toll-free call).

Section 995.—Taxation of DISC Income to Shareholders

2004 base period T-bill rate. The “base period T-bill rate” for the period ending September 30, 2004, is published as required by section 995(f) of the Code.

Rev. Rul. 2004–99

Section 995(f)(1) of the Internal Revenue Code provides that a shareholder of a DISC shall pay interest each taxable year in an amount equal to the product of the

shareholder’s DISC-related deferred tax liability for the year and the “base period T-bill rate.” Under section 995(f)(4), the base period T-bill rate is the annual rate of interest determined by the Secretary to be equivalent to the average of the 1-year constant maturity Treasury yields, as published by the Board of Governors of the Federal Reserve System, for the 1-year period ending on September 30 of the calendar year ending with (or of the most recent calendar year ending before) the close of the taxable year of the shareholder. The base period T-bill rate for the period ending September 30, 2004 is 1.60 percent.

2004–44 I.R.B. 720 November 1, 2004

2004 ANNUAL RATE, COMPOUNDED DAILY

Pursuant to section 6222 of the Code, interest must be compounded daily. The table below provides factors for compounding the base period T-bill rate daily for any number of days in the shareholder’s taxable year (including a 52–53 week accounting period) for the 2004 base period T-bill rate. To compute the amount of the interest charge for the shareholder’s taxable year, multiply the amount of the shareholder’s DISC-related deferred tax liability (as defined in section 995(f)(2)) for that year by the base period T-bill rate factor corresponding to the number of days in the shareholder’s taxable year for which the interest charge is being computed. Generally, one would use the factor for 365 days. One would use a different factor only if the shareholder’s taxable year for which the interest charge being determined is a short taxable year, if the shareholder uses the 52–53 week taxable year, or if the shareholder’s taxable year is a leap year.

For the base period T-bill rates for the periods ending in prior years, see Rev. Rul. 2003–111, 2003–45 I.R.B. 1009, Rev. Rul. 2002–68, 2002–2 C.B. 808, Rev. Rul. 2001–56, 2001–2 C.B. 500, and Rev. Rul. 2000–52, 2000–2 C.B. 516.

DRAFTING INFORMATION

The principal author of this revenue ruling is David Bergkuist of the Office of the Associate Chief Counsel (International). For further information about this revenue ruling, contact Mr. Bergkuist at (202) 622–3850 (not a toll-free call).

2004 ANNUAL RATE, COMPOUNDED DAILY

11 .000480979 12 .000524716 13 .000568455 14 .000612196 15 .000655938

16 .000699683 17 .000743429 18 .000787178 19 .000830928 20 .000874680

21 .000918434 22 .000962190 23 .001005948 24 .001049708 25 .001093470

26 .001137233 27 .001180999 28 .001224766 29 .001268536 30 .001312307

31 .001356080 32 .001399855 33 .001443632 34 .001487411 35 .001531192

36 .001574975 37 .001618760 38 .001662546 39 .001706335 40 .001750125

41 .001793918 42 .001837712 43 .001881508 44 .001925306 45 .001969106

46 .002012908 47 .002056712 48 .002100518 49 .002144325 50 .002188135

51 .002231947 52 .002275760 53 .002319575 54 .002363393 55 .002407212

56 .002451033 57 .002494856 58 .002538681 59 .002582508 60 .002626336

2004 ANNUAL RATE, COMPOUNDED DAILY

DAYS

1.60 PERCENT FACTOR

61 .002670167 62 .002714000 63 .002757834 64 .002801670 65 .002845509

66 .002889349 67 .002933191 68 .002977035 69 .003020881 70 .003064729

71 .003108579 72 .003152431 73 .003196284 74 .003240140 75 .003283997

76 .003327857 77 .003371718 78 .003415581 79 .003459447 80 .003503314

81 .003547183 82 .003591054 83 .003634926 84 .003678801 85 .003722678

86 .003766556 87 .003810437 88 .003854319 89 .003898204 90 .003942090

91 .003985978 92 .004029868 93 .004073760 94 .004117654 95 .004161550

96 .004205448 97 .004249347 98 .004293249 99 .004337153 100 .004381058

101 .004424965 102 .004468875 103 .004512786 104 .004556699 105 .004600614

106 .004644531 107 .004688450 108 .004732371 109 .004776293 110 .004820218

DAYS

1.60 PERCENT FACTOR

1 .000043716 2 .000087434 3 .000131153 4 .000174875 5 .000218598

6 .000262324 7 .000306051 8 .000349780 9 .000393511 10 .000437244

November 1, 2004 721 2004–44 I.R.B.

2004 ANNUAL RATE, COMPOUNDED DAILY

DAYS

1.60 PERCENT FACTOR

111 .004864145 112 .004908073 113 .004952004 114 .004995936 115 .005039870

116 .005083806 117 .005127744 118 .005171684 119 .005215626 120 .005259570

121 .005303516 122 .005347464 123 .005391413 124 .005435365 125 .005479318

126 .005523274 127 .005567231 128 .005611190 129 .005655151 130 .005699114

131 .005743079 132 .005787046 133 .005831015 134 .005874986 135 .005918959

136 .005962933 137 .006006910 138 .006050888 139 .006094869 140 .006138851

141 .006182835 142 .006226821 143 .006270809 144 .006314799 145 .006358791

146 .006402785 147 .006446781 148 .006490778 149 .006534778 150 .006578779

151 .006622783 152 .006666788 153 .006710796 154 .006754805 155 .006798816

156 .006842829 157 .006886844 158 .006930861 159 .006974880 160 .007018900

161 .007062923 162 .007106948 163 .007150974 164 .007195003 165 .007239033

166 .007283065 167 .007327100 168 .007371136 169 .007415174 170 .007459214

171 .007503256 172 .007547300 173 .007591345 174 .007635393 175 .007679443

176 .007723494 177 .007767548 178 .007811603 179 .007855661 180 .007899720

181 .007943781 182 .007987844 183 .008031909 184 .008075976 185 .008120045

186 .008164116 187 .008208189 188 .008252263 189 .008296340 190 .008340418

191 .008384499 192 .008428581 193 .008472666 194 .008516752 195 .008560840

196 .008604930 197 .008649022 198 .008693116 199 .008737212 200 .008781310

201 .008825409 202 .008869511 203 .008913615 204 .008957720 205 .009001828

206 .009045937 207 .009090048 208 .009134162 209 .009178277 210 .009222394

211 .009266513 212 .009310634 213 .009354757 214 .009398881 215 .009443008

216 .009487137 217 .009531267 218 .009575400 219 .009619534 220 .009663671

221 .009707809 222 .009751949 223 .009796091 224 .009840236 225 .009884382

226 .009928529 227 .009972679 228 .010016831 229 .010060985 230 .010105141

231 .010149298 232 .010193458 233 .010237619 234 .010281783 235 .010325948

236 .010370115 237 .010414284 238 .010458455 239 .010502629 240 .010546803

241 .010590980 242 .010635159 243 .010679340 244 .010723523 245 .010767707

246 .010811894 247 .010856082 248 .010900273 249 .010944465 250 .010988660

251 .011032856 252 .011077054 253 .011121254 254 .011165456 255 .011209660

256 .011253866 257 .011298074 258 .011342283 259 .011386495 260 .011430709

2004–44 I.R.B. 722 November 1, 2004

2004 ANNUAL RATE, COMPOUNDED DAILY

DAYS

1.60 PERCENT FACTOR

261 .011474924 262 .011519142 263 .011563361 264 .011607583 265 .011651806

266 .011696031 267 .011740258 268 .011784487 269 .011828718 270 .011872951

271 .011917186 272 .011961423 273 .012005662 274 .012049902 275 .012094145

276 .012138390 277 .012182636 278 .012226884 279 .012271135 280 .012315387

281 .012359641 282 .012403897 283 .012448156 284 .012492416 285 .012536678

286 .012580941 287 .012625207 288 .012669475 289 .012713745 290 .012758016

291 .012802290 292 .012846565 293 .012890843 294 .012935122 295 .012979404

296 .013023687 297 .013067972 298 .013112259 299 .013156548 300 .013200839

301 .013245132 302 .013289427 303 .013333724 304 .013378023 305 .013422323

306 .013466626 307 .013510930 308 .013555237 309 .013599545 310 .013643856

311 .013688168 312 .013732482 313 .013776798 314 .013821117 315 .013865437

316 .013909759 317 .013954082 318 .013998408 319 .014042736 320 .014087066

321 .014131398 322 .014175731 323 .014220067 324 .014264404 325 .014308744

326 .014353085 327 .014397428 328 .014441774 329 .014486121 330 .014530470

331 .014574821 332 .014619174 333 .014663529 334 .014707886 335 .014752245

336 .014796605 337 .014840968 338 .014885333 339 .014929699 340 .014974068

341 .015018438 342 .015062811 343 .015107185 344 .015151561 345 .015195939

346 .015240320 347 .015284702 348 .015329086 349 .015373472 350 .015417860

351 .015462249 352 .015506641 353 .015551035 354 .015595431 355 .015639828

356 .015684228 357 .015728629 358 .015773033 359 .015817438 360 .015861845

361 .015906255 362 .015950666 363 .015995079 364 .016039494 365 .016083911

366 .016128330 367 .016172751 368 .016217174 369 .016261599 370 .016306025

371 .016350454

November 1, 2004 723 2004–44 I.R.B.