This Week's Internal Revenue Bulletin

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.

ADMINISTRATIVE

REV. RUL. 2020-28, page 1669. Interest rates: underpayments and overpayments. The rates for interest determined under Section 6621 of the code for the calendar quarter beginning January 1, 2021, will be 3 percent for overpayments (2 percent in the case of a corporation), 3 percent for underpayments, and 5 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 will be 0.5 percent.

T.D. 9912, page 1688. These final regulations under sections 36B and 6011 of the Internal Revenue Code (Code) clarify that the reduction of the personal exemption deduction to zero for taxable years beginning after December 31, 2017, and before January 1, 2026, does not affect an individual taxpayer's ability to claim the premium tax credit. These final regulations affect individuals who claim the premium tax credit.

EXEMPT ORGANIZATIONS

T.D. 9933, page 1692. Certain organizations that are generally exempt from federal income taxes are taxed on income from business activities that are not related to their exempt purpose. The calculation of the tax on the unrelated business income depends upon whether the tax-exempt organization has more than one unrelated trade or business. The final regulations provide guidance on how these tax-exempt organizations determine if they have more than one unrelated trade or business, and, if so, how to calculate the amount of taxable income they have from the unrelated business activities. The final regulations also clarify that these regulations, as well as others on this topic, apply to individual retirement accounts.

INCOME TAX

T.D. 9934, page 1729. This document contains final regulations that coordinate the extraordinary disposition rules issued under Treasury regulation section 1.245A-5(c) and (d) and the disqualified basis rule issued under Treasury regulation section 1.951A-2(c)(5). This document also contains reporting rules under section 6038 to facilitate administration of these rules.

T.D. 9935, page 1746. These final regulations amend the current like-kind exchange regulations to add a definition of real property to implement statutory changes limiting section 1031 treatment to like-kind exchanges of real property. The final regulations also provide a rule addressing a taxpayer's receipt of personal property that is incidental to real property the taxpayer receives in an otherwise qualifying like-kind exchange of real property.