Part I. Rulings — Internal Revenue Bulletin 2018-23

IRC section 512.—Unrelated business taxable income

IRC section 172.—Net operating loss deduction

26 CFR: 1.512(b)–1

26 CFR: 1.172–1

Rev. Rul. 2018–14

The Internal Revenue Service (IRS) is continuing its program of reviewing revenue rulings published in the Internal Revenue Bulletin to identify and publish lists of those rulings that are obsolete and therefore are no longer considered determinative because: (1) the applicable statutory provisions or regulations have been changed or repealed; (2) the ruling position is specifically covered by a statute, regulation, or subsequent published position; or (3) the facts set forth no longer exist or are not sufficiently described to permit clear application of the current statute and regulations.

This revenue ruling obsoletes Rev. Rul. 68–59, 1968–1 C.B. 273, which held that an exempt organization in computing its net operating loss under § 172 of the Internal Revenue Code (Code) must exclude the specific deduction of $1,000 provided in § 512(b)(12) of the Code. Section 512(b)(12) was amended to disallow the $1,000 specific deduction for the purpose of computing the net operating loss under § 172. Tax Reform Act of 1969, Pub. L. No. 91– 172, § 121(b)(2)(B), 83 Stat 487, 539 (1969).

Rev. Rul. 68–59 has been identified under the IRS’s review program as no longer being determinative because the ruling position is now specifically covered by a statute and is hereby declared obsolete.

DRAFTING INFORMATION

The principal author of this revenue ruling is Gregory Schantz of the Office of Associate Chief Counsel (Tax Exempt and Government Entities Associate Chief Counsel). For further information regarding this revenue ruling, contact Gregory Schantz at (202) 317-4086 (not a toll-free number).

IRC section 170(b)(1)(A)(vi).— Publicly supported organizations rulings IRC section 509.—Private foundation defined

26 CFR : 1.170A–9(e)(5) Advance ruling process for publicly supported organizations 26 CFR : 1.509(a)–3(d) Advance rulings to newly created organizations

Rev. Rul. 2018–15

changed or repealed; (2) the ruling position is specifically covered by a statute, regulation, or subsequent published position; or (3) the facts set forth no longer exist or are not sufficiently described to permit clear application of the current statute and regulations.

This revenue ruling publishes a list of rulings which provided guidance on the advance ruling process under former §§ 1.170A–9(e)(5) and 1.509(a)–3(d) of the Income Tax Regulations for a newly created organization described in § 501(c)(3) of the Internal Revenue Code (section 501(c)(3) organization). Final regulations promulgated by T.D. 9549, 2011–46 I.R.B. 718, 76 FR 55746–01, eliminated the advance ruling process for determining whether a newly created section 501(c)(3) organization is not a private foundation. See §§ 1.170A–9(f)(5) and 1.509(a)–3(e). Under the new regulations, the IRS will classify a newly created section 501(c)(3) organization as a publicly supported organization in its first five years of existence if it can show in its application for exemption that it can reasonably be expected to receive the requisite public support during such period. See §§ 1.170A–9(f)(4) and 1.509(a)–3(d). The listed revenue rulings have been identified under the IRS’s review program as no longer being determinative because the applicable regulations have been changed.

Accordingly, the revenue rulings listed below are hereby declared obsolete.

Rev. Rul. No. C.B. Citation

Rev. Rul. 74–487, 1974–2 C.B. 82;
Rev. Rul. 75–211, 1975–1 C.B. 86;
Rev. Rul. 77–115, 1977–1 C.B. 154;
Rev. Rul. 77–407, 1977–2 C.B. 77;
Rev. Rul. 80–113, 1980–1 C.B. 58.

The IRS will continue to review other revenue rulings relating to the advance ruling process in former §§ 1.170A– 9(e)(5) and 1.509(a)–3(d) to identify those

that, for the reasons stated above, are inapplicable to future transactions. Therefore, failure to include any particular revenue ruling in the above list should not be

construed as an indication that the revenue ruling necessarily is determinative with respect to future transactions.

June 4, 2018 736 Bulletin No. 2018–23

DRAFTING INFORMATION

The principal author of this revenue ruling is Gregory Schantz of the Office of Associate Chief Counsel (Tax Exempt and Government Entities). For further information regarding this revenue ruling, contact Gregory Schantz at (202) 3174086 (not a toll-free number).

Section 1274.—Determina- tion of Issue Price in the Case of Certain Debt Instruments Issued for Property

(Also Sections 42, 280G, 382, 467, 468, 482, 483, 1288, 7520.)

Rev. Rul. 2018–16

This revenue ruling provides various prescribed rates for federal income tax purposes for June 2018 (the current month). Table 1 contains the short-term, mid-term, and long-term applicable federal rates (AFR) for the current month for purposes of section 1274(d) of the Internal Revenue Code. Table 2 contains the shortterm, mid-term, and long-term adjusted applicable federal rates (adjusted AFR) for the current month for purposes of section 1288(b). Table 3 sets forth the adjusted federal long-term rate and the longterm tax-exempt rate described in section 382(f). Table 4 contains the appropriate percentages for determining the low

REV. RUL. 2018–16 TABLE 1

Applicable Federal Rates (AFR) for June 2018

income housing credit described in section 42(b)(1) for buildings placed in service during the current month. However, under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July 30, 2008, shall not be less than 9%. Finally, Table 5 contains the federal rate for determining the present value of an annuity, an interest for life or for a term of years, or a remainder or a reversionary interest for purposes of section 7520.

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-term

AFR 2.34% 2.33% 2.32% 2.32%

110% AFR 2.58% 2.56% 2.55% 2.55%

120% AFR 2.82% 2.80% 2.79% 2.78%

130% AFR 3.05% 3.03% 3.02% 3.01%

Mid-term

AFR 2.86% 2.84% 2.83% 2.82%

110% AFR 3.14% 3.12% 3.11% 3.10%

120% AFR 3.44% 3.41% 3.40% 3.39%

130% AFR 3.72% 3.69% 3.67% 3.66%

150% AFR 4.31% 4.26% 4.24% 4.22%

175% AFR 5.03% 4.97% 4.94% 4.92%

Long-term

AFR 3.05% 3.03% 3.02% 3.01%

110% AFR 3.36% 3.33% 3.32% 3.31%

120% AFR 3.67% 3.64% 3.62% 3.61%

130% AFR 3.98% 3.94% 3.92% 3.91%

REV. RUL. 2018–16 TABLE 2

Adjusted AFR for June 2018

Period for Compounding

Annual Semiannual Quarterly Monthly

Short-term adjusted AFR 1.78% 1.77% 1.77% 1.76%

Mid-term adjusted AFR 2.17% 2.16% 2.15% 2.15%

Long-term adjusted AFR 2.31% 2.30% 2.29% 2.29%

Bulletin No. 2018–23 737 June 4, 2018

REV. RUL. 2018–16 TABLE 3

Rates Under Section 382 for June 2018

Adjusted federal long-term rate for the current month 2.31%

Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted 2.31% federal long-term rates for the current month and the prior two months.)

REV. RUL. 2018–16 TABLE 4

Appropriate Percentages Under Section 42(b)(1) for June 2018

Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July 30, 2008, shall not be less than 9%.

Appropriate percentage for the 70% present value low-income housing credit 7.68%

Appropriate percentage for the 30% present value low-income housing credit 3.29%

REV. RUL. 2018–16 TABLE 5

Rate Under Section 7520 for June 2018

Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years, or a remainder or reversionary interest

3.4%

Section 42.—Low-Income Housing Credit