Daily Tax Update - July 18, 2016: IRS Publishes Applicable Interest Rates for August

IRS Publishes Applicable Interest Rates for August:  Today, the IRS issued Revenue Ruling 2016-18 that provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, and the adjusted federal long-term tax-exempt rate.  These rates are effective for August 2016.

DTU IN DEPTH

IRS Issues Proposed Regulations on Device and Active Trade or Business Under Section 355:   As foreshadowed in Notice 2015-59 and the accompanying no-rules in Revenue Procedure 2015-43 last September, the Treasury Department and the IRS have issued proposed regulations under section 355.  The proposed rules generally fall into two categories:  first, rules that would modify the current device regulations to provide more objective guidance on certain device and non-device factors; and second, rules that would add a new minimum size for the active trade or business requirement.  (Significantly, the preamble says that the government continues to study both (i) the active trade or business issues in the proposed regulations and (ii) issues relating to the repeal of the General Utilities doctrine presented by the separation of business and nonbusiness assets.)  Click here for more in depth coverage.