HIGHLIGHTS OF THIS ISSUE

These synopses are intended only as aids to the reader in identifying the subject matter covered. They may not be relied upon as authoritative interpretations.

INCOME TAX

Rev. Rul. 2005–45, page 123. LIFO; price indexes; department stores. The May 2005 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, May 31, 2005.

Rev. Rul. 2005–46, page 120. Disaster relief grants for businesses. This ruling holds that a grant received by a business under a state program to reimburse businesses for losses incurred for damage or destruction of real and personal property on account of a disaster is not excludable from gross income under the general welfare exclusion, as a gift under section 102 of the Code, as a qualified disaster relief payment under section 139, or as a contribution to the capital of a corporation under section 118. The business may elect under section 1033 to defer including in income gain realized from receipt of the grant to the extent the grant proceeds are used to timely purchase property similar or related in service or use to the destroyed or damaged property.

Rev. Proc. 2005–46, page 142. This procedure prescribes the procedure to be followed with respect to the claiming of any setoffs to adjustments proposed by the Commissioner pursuant to section 482 of the Code. Rev. Proc. 70–8 modified.

Announcement 2005–50, page 152. This document contains a correction to Table 2 of Rev. Rul. 2005–41, 2005–28 I.R.B. 69, relating to Farm Rates 2005. Rev. Rul. 2005–41 corrected.

Announcements of Disbarments and Suspensions begin on page 144. Finding Lists begin on page ii. Index for July begins on page iv.