Daily Tax Update - August 26, 2016: IRS to Resume Issuing Letter Rulings on Certain Spin-Off Issues

IRS to Resume Issuing Letter Rulings on Certain Spin-Off Issues:  Rev. Proc. 2016-45, issued by the IRS today, modifies Rev. Proc. 2016-3, which sets forth areas on which the IRS will not issue letter rulings or determination letters, by removing two no-rule areas relating to distributions of stock of controlled corporations under section 355.  The two areas that are no longer no-rule areas are significant legal issues relating to (i) the corporate business purpose requirement; and (ii) the device test.

IRS Releases Guidance on PATH Act Provisions:  Today, the IRS issued Rev. Proc. 2016-48, which provides guidance for issues related to certain provisions extended by the Protecting Americans From Tax Hikes Act of 2015 (PATH Act), enacted in December 2015.  The covered provisions include: (i) the extension of the section 179(f) election to expense certain qualified real property used in an active trade or business; (ii) the extension of bonus depreciation under section 168(k); and (iii) an election under section 168(k)(4) to increase the AMT credit limitation under section 53(c) in lieu of bonus depreciation.  The guidance includes procedures for making certain elections and filing amended returns.