Rev. Rul. 2009-14 does not change, but

B’s situation is no longer distinguishable from that of A in Situation 3 of Rev. Rul. 2009-13 with regards to the treatment of cost of insurance charges.

HOLDINGS

1. In Situation 2 of Rev. Rul. 2009-13, A recognizes $16,000 of income upon the sale of the life insurance contract, of which $14,000 is ordinary income, and $2,000 is long-term capital gain. ²

2. In Situation 3 of Rev. Rul. 2009-13, A recognizes a long-term capital loss of $25,000 upon the sale of the life insurance contract.

3. In Situation 2 of Rev. Rul. 2009-14, B recognizes $1,000 of long-term capital gain upon the sale of the life insurance contract.

EFFECT ON OTHER DOCUMENTS

This revenue ruling modifies Rev. Rul. 2009-13 and Rev. Rul. 2009-14.

EFFECTIVE DATE

Consistent with the effective date of the TCJA amendment to § 1016(a), this revenue ruling is effective for transactions entered into on or after August 26, 2009. See § 7805(b)(8). A change in the internal revenue laws that is made retroactive to earlier taxable years does not automatically permit a claim for a refund for such a year when the claim is barred by the period of limitations. See United States v. Zacks, 375 U.S. 59 (1963). Congress did not amend the statute of limitations set forth in § 6511 or otherwise express an intent to waive or extend the period of limitations for the retroactive change made to § 1016(a) by section 13521 of the TCJA.

DRAFTING INFORMATION

The principal author of this revenue ruling is Megan McGuire of the Office of the Associate Chief Counsel (Financial Institutions and Products). For further information regarding this revenue ruling, contact Ms. McGuire at (202) 317-6995 (not a toll-free number).

2 Section 13521 of the TCJA only applies to determine a taxpayer’s adjusted basis in a life insurance contract under § 1016. Section 13521 of the TCJA does not affect the analysis in Situations 2 and 3 of Rev. Rul. 2009-13 and Situation 2 of Rev. Rul. 2009-14 with respect to the character of any income or loss recognized by a taxpayer on the sale of a life insurance contract.

Bulletin No. 2020–9 455 February 24, 2020