Bulletin No. 2005-21 May 23, 2005

foreign source taxable income. Taxpayers may elect to compute the value of assets on the basis of fair market value or tax book value. In March 2004, Treasury and the IRS issued temporary and proposed regulations that contained a third method for determining the value of assets, the “alternative tax book value method.”

Announcement 2005–35, page 1095. This document contains corrections to temporary regulations (T.D. 9170, 2005–4 I.R.B. 363) that provide guidance concerning the applicability of section 1374 to S corporations that acquire assets in carryover basis transactions from C corporations on or after December 27, 1994, and to certain corporations that terminate S corporation status and later elect again to become S corporations.