Part III. Administrative, Procedural, and Miscellaneous

2010 Section 43 Inflation Adjustment

Notice 2010–72

Section 43(b)(3)(B) of the Internal Revenue Code requires the Secretary to publish an inflation adjustment factor. The enhanced oil recovery credit under § 43 for any taxable year is reduced if the “reference price,” determined under § 45K(d)(2)(C), for the calendar year preceding the calendar year in which the

taxable year begins is greater than $28 multiplied by the inflation adjustment factor for that year. The credit is phased out in any taxable year in which the reference price for the preceding calendar year exceeds $28 (as adjusted) by at least $6.

The term “inflation adjustment factor” means, with respect to any calendar year, a fraction the numerator of which is the GNP implicit price deflator for the preceding calendar year and the denominator of which is the GNP implicit price deflator for 1990.

Because the reference price for the 2009 calendar year ($56.39) exceeds $28 multiplied by the inflation adjustment factor for the 2009 calendar year ($42.57) by $13.82, the enhanced oil recovery credit for qualified costs paid or incurred in 2010 is phased out completely.

Table 1 contains the GNP implicit price deflator used for the 2010 calendar year, as well as the previously published GNP implicit price deflators used for the 1991 through 2009 calendar years.

• Beginning in 1995, the GNP implicit price deflator was rebased relative to 1992. The 1990 GNP implicit price deflator used to compute the 1996 § 43 inflation adjustment factor is 93.6.

** Beginning in 1997, two digits follow the decimal point in the GNP implicit price deflator. The 1990 GNP price deflator used to compute the 1998 § 43 inflation adjustment factor is 93.63.

*** Beginning in 1999, the GNP implicit price deflator was rebased relative to 1996. The 1990 GNP implicit price deflator used to compute the 2000 § 43 inflation adjustment factor is 86.53.

**** Beginning in 2003, the GNP implicit price deflator was rebased, and the 1990 GNP implicit price deflator used to compute the 2004 § 43 inflation adjustment factor is 81.589.

***** Beginning in 2009, the GNP implicit price deflator was rebased, and the 1990 GNP implicit price deflator used to compute the 2010 § 43 inflation adjustment factor is 72.199.

Table 2 contains the inflation adjustment factor and the phase-out amount for taxable years beginning in the 2010

calendar year as well as the previously published inflation adjustment factors and phase-out amounts for taxable years be

ginning in the 1991 through 2009 calendar years.

November 15, 2010 661 2010–46 I.R.B.

DRAFTING INFORMATION

The principal author of this notice is Martha S. McRee of the Office of Associate Chief Counsel (Passthroughs and Special Industries). For further information regarding this notice, contact Ms. McRee at (202) 622–3110 (not a toll-free call).

2010 Marginal Production Rates

Notice 2010–73

This notice announces the applicable percentage under § 613A of the Internal Revenue Code to be used in determining percentage depletion for marginal properties for the 2010 calendar year.

Section 613A(c)(6)(C) defines the term “applicable percentage” for purposes of determining percentage depletion for oil and gas produced from marginal properties. The applicable percentage is the per

centage (not greater than 25 percent) equal to the sum of 15 percent, plus one percentage point for each whole dollar by which $20 exceeds the reference price (determined under § 45K(d)(2)(C)) for crude oil for the calendar year preceding the calendar year in which the taxable year begins. The reference price determined under § 45K(d)(2)(C) for the 2009 calendar year is $56.39.

Table 1 contains the applicable percentages for marginal production for taxable years beginning in calendar years 1991 through 2010.

2010–46 I.R.B. 662 November 15, 2010

National Pool amount from which credits can be redistributed to qualified states.

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

26 CFR 601.602: Tax forms and instructions. (Also Part I, §§ 1, 36C, 42, 59, 62, 135, 137, 146, 147, 148, 170, 213, 220, 512, 513, 877, 877A, 911, 2032A, 2503, 2523, 4161, 6033, 6039F, 6323, 6334, 6601, 7430, 7702B; 1.148–3, 1.148–5.)

Rev. Proc. 2010–40

Code Section

The principal author of this notice is Martha S. McRee of the Office of Associate Chief Counsel (Passthroughs and Special Industries). For further information regarding this notice, contact Ms. McRee at (202) 622–3110 (not a toll-free call).

2010 National Pool

Notice 2010–74

This notice informs taxpayers that there is no unused housing credit carryover amount to be allocated to qualified states under § 42(h)(3)(D) of the Internal Revenue Code for calendar year 2010.

Rev. Proc. 92–31, 1992–1 C.B. 775, provides guidance to state housing credit