INCOME TAX

T.D. 9403, page 285. Final regulations under section 664(c) of the Code provide that charitable remainder trusts with unrelated business taxable income (UBTI) in taxable years beginning after December 31, 2006, are exempt from federal income tax but are subject to a 100 percent excise tax on the UBTI of the charitable remainder trust pursuant to section 424 of the Tax Relief and Health Care Act of 2006. The regulations provide that the excise tax is reported and payable in accordance with appropriate forms. The regulations clarify that, consistent with regulations section 1.664–1(d)(2), the excise tax imposed upon the charitable remainder trust with UBTI is treated as paid from corpus, and the trust income that is UBTI is income of the trust for purposes of determining the character of the distribution made to the beneficiary.

T.D. 9404, page 280. REG–143453–05, page 310. Section 179B of the Code allows small business refiners to make an election to deduct as an expense 75 percent of the qualified costs paid or incurred to comply with the highway diesel fuel sulfur control requirements of the Environmental Protection Agency (EPA). Temporary and proposed regulations under Section 179B provide guidance relating to the deduction for qualified capital costs paid or incurred by a small business refiner to comply with the highway diesel fuel sulfur control requirements of the EPA and provide guidance for making the election. A public hearing on the proposed regulations is scheduled for October 28, 2008.