Revocation of IRC 501(c)(3) Organizations for failure to meet the code section requirements. Contributions made to the organizations by individual donors are no longer deductible under IRC 170(b)(1)(A).

Notice 2024-55 provides guidance in the form of questions and answers with respect to sections 115 and 314 of Division T of the Consolidated Appropriations Act, 2023, Pub. L. 117-328, 136 Stat. 4459 (2022), known as the SECURE 2.0 Act of 2022 (SECURE 2.0 Act). Section 115 of the SECURE 2.0 Act adds section 72(t)(2)(I) to the Internal Revenue Code (Code), which permits a distribution from an applicable eligible retirement plan to an individual for purposes of meeting unforeseeable or immediate financial needs relating to necessary personal or family emergency expenses. Section 314 of the SECURE 2.0 Act adds section 72(t)(2)(K) to the Code, which permits a distribution from an applicable eligible retirement plan to a domestic abuse victim if made during the 1-year period beginning on the date on which the individual is a victim of domestic abuse by a spouse or domestic partner. These two types of distributions are includible in gross income but are not subject to the 10 percent additional tax under section 72(t)(1).

This notice announces that the Department of the Treasury and the Internal Revenue Service intend to issue two sets of proposed regulations that would provide special rules for certain transactions under §§ 732, 734, 743, 755, and 1502 of the Internal Revenue Code. First, proposed regulations under §§ 732, 734, 743, and 755 would provide special rules for the cost recovery of positive basis adjustments or the ability to take positive basis adjustments into account in computing gain or loss on the disposition of basis adjusted property following certain transactions. Second, proposed regulations under § 1502 would provide rules to clearly reflect the taxable income and tax liability of a consolidated group whose members own interests in a partnership.

REG-124593-23 is a notice of proposed rulemaking (NPRM) that identifies certain partnership transactions as “transactions of interest,” a type of reportable transaction. The transactions include either the distribution of partnership property when the partnership has two or more related partners, or the transfer of a partnership interest in a nonrecognition transaction when the transferor is related to the transferee or the transferee is related to one or more of the partners. The transactions of interest involve related parties as defined under section 267(b) (without regard to section 267(c)(3)) or section 707(b)(1), a transfer of a partnership interest or distribution of partnership property, and a resulting aggregate increase to the basis of partnership property or distributed property under sections 732(b) or (d), 734(b), or 743(b) for the taxable year that exceeds the gain recognized, if any on which tax is required to be paid by any of the related partners by $5 million or more. The basis increase allows related parties an opportunity to decrease their taxable income through increased cost recovery allowances or reduced taxable gain (or increased taxable loss) on the disposition of the property in a transaction in which gain or loss is recognized in whole or in part.

Federal rates; adjusted federal rates; adjusted federal long-term rate, and the long-term tax exempt rate. For purposes of sections 382, 1274, 1288, 7872 and other sections of the Code, tables set forth the rates for July 2024.

(Also Sections 42, 280G, 382, 467, 468, 482, 483, 1288, 7520, 7872.)

This Revenue Ruling advises taxpayers of the Service’s position challenging certain partnership related-party transactions under the codified economic substance doctrine in § 7701(o). Under the ruling, the Service applies the economic substance doctrine in three situations involving related parties where some or all of whom are partners in a partnership, and the parties: (1) create basis disparities through various methods; (2) capitalize on these basis disparities either by transferring a partnership interest in a nonrecognition transaction or by making a current or liquidating distribution of partnership property to a partner; and (3) claim a basis adjustment under §§ 732(b), 734(b), or 743(b). The ruling holds that these transaction structures lack economic substance under § 7701(o). In such cases, the Service will disregard the basis adjustments.

(Also §§ 732, 734, 743, 754, 755)