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. 2012–20, page 1. Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for July 2012.

REG–134042–07, page 5. Proposed regulations under section 1366 of the Code relate to basis of indebtedness of S corporations to their shareholders. The proposed regulations provide that S corporation shareholders increase their basis of indebtedness of the S corporation to the shareholder only if the indebtedness is bona fide . The proposed regulations affect shareholders of S corporations. A public hearing is scheduled for October 9, 2012.

Rev. Proc. 2012–28, page 4. This procedure provides a safe harbor for determining whether a publicly traded partnership’s (PTP’s) income from discharge of indebtedness (COD income) is qualifying income under section 7704(d) of the Code for the purpose of meeting the qualifying income exception in section 7704(c). The safe harbor treats COD income attributable to debt incurred in direct connection with the PTP’s activities that generate qualifying income (qualifying activities) as qualifying income.

Announcement 2012–27, page 10. This announcement withdraws (REG–100276–97) relating to financial asset securitization trusts (FASITs) under sections 860H through 860L of the Code. The FASIT provisions were repealed by PL 108-357, effective January 1, 2005, with limited exception for existing FASITs.

Announcements of Disbarments and Suspensions begin on page 10. Finding Lists begin on page ii.