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. 2011–15, page 57. Life insurance gross income; original issue discount. This ruling concludes that the 1994 publication of regulations concerning original issue discount (OID) rendered obsolete Rev. Rul. 58–225, 1958–1 C.B. 258, which held that a life insurance company must include in taxable income the amount of interest collected in advance under policyholder loans. Rev. Rul. 58–225 obsoleted.

T.D. 9529, page 57. REG–101352–11, page 75. Temporary and proposed regulations under section 6038A of the Code remove the requirement that taxpayers required to file Form 5472 (Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business) must file a duplicate Form 5472 with the Philadelphia Service Center. Corresponding amendments are made to section 1.6038A–1(n)(2) with respect to the effective dates of sections 1.6038A–2(d) and 1.6038A–2(e).

Rev. Proc. 2011–38, page 66. This procedure addresses the tax treatment under sections 1035 and 72 of the Code of the partial exchange of an annuity contract. Specifically, the procedure provides that the direct transfer of a portion of the cash surrender value of an existing annuity contract for a second annuity contract will be treated as a tax-free exchange under section 1035 if no amount other than an amount received as an annuity for a period of 10 years or more, or during one or more lives, is received during the 180 days beginning on the date of the transfer. A subsequent direct transfer of all or a portion of either contract involved in an exchange is not taken into account if the subsequent transfer qualifies (or is intended to qualify) as a tax-free exchange.

Finding Lists begin on page ii. Index for July begins on page iv.