Bulletin No. 2014–12 March 17, 2014

Urban Development (HUD). The proposed revenue procedure also provides these issuers with guidance concerning the area median gross incomes as computed by HUD. Issuers of qualified mortgage bonds (QMB) and mortgage credit certificates (MCC) must use these income figures in determining whether the income limitation placed on the beneficiaries of the mortgages and certificates may be increased because the residences to be financed are located in high housing cost areas. See §§ 25(c)(2)(A)(iii)(IV) and 143(f)(5).

T.D. 9652, page 655. Final regulations provide rules under sections 263A and 471 of the Code relating to capitalizing and allocating sales-based royalties, and adjusting the cost of merchandise inventory for sales-based vendor allowances. The regulations provide rules for accounting for these items under the simplified production method and the simplified resale method.

T.D. 9659, page 653. Section 83 addresses the income tax consequences of property transferred in connection with the performance of services. The final regulations clarify the definition of a substantial risk of forfeiture under §1.83–3(c)(1). The final regulations also update the regulations under §1.83–3 to incorporate the holdings in Revenue Ruling 2005–48 (2005–2 CB 259) which address the substantial risk of forfeiture created by liability under Section 16(b) of the Securities Exchange Act of 1934. Rev. Rul. 2005–48 (2005–2 CB 259) is obsolete as of February 26, 2014.

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EMPLOYEE PLANS

T.D. 9659, page 653. Section 83 addresses the income tax consequences of property transferred in connection with the performance of services. The final regulations clarify the definition of a substantial risk of forfeiture under §1.83–3(c)(1). The final regulations also update the regulations under §1.83–3 to incorporate the holdings in Revenue Ruling 2005–48 (2005–2 CB 259) which address the substantial risk of forfeiture created by liability under Section 16(b) of the Securities Exchange Act of 1934. Rev. Rul. 2005–48 (2005–2 CB 259) is obsolete as of February 26, 2014.

ADMINISTRATIVE

Rev. Proc. 2014–23, page 684. The proposed revenue procedure provides issuers of qualified mortgage bonds, as defined in § 143(a) of the Internal Revenue Code, and issuers of mortgage credit certificates, as defined in § 25(c), with the United States median gross income figure most recently computed by the Department of Housing and Urban Development (HUD). The proposed revenue procedure also provides these issuers with guidance concerning the area median gross incomes as computed by HUD. Issuers of qualified mortgage bonds (QMB) and mortgage credit certificates (MCC) must use these income figures in determining whether the income limitation placed on the beneficiaries of the mortgages and certificates may be increased because the residences to be financed are located in high housing cost areas. See §§ 25(c)(2)(A)(iii)(IV) and 143(f)(5).