Internal Revenue Bulletin 2008-10 (PDF rendition): IRS Revenue Procedures

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Bulletin No. 200
8-10
March 10, 2008
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.
INCOME TAX
Rev. Rul. 2008–11, page 541.
Federal rates; adjusted federal rates; adjusted federal
long-term rate and the long-term exempt rate.For pur-
poses of sections 382, 642, 1274, 1288, and other sections
of the Code, tables set forth the rates for March 2008.
Rev. Rul. 2008–12, page 520.
Application of section 163(d) to limited partners in a
trader partnership.This ruling explains how section 163(d)
of the Code applies to a noncorporate limited partner’s distribu-
tive share of the interest expense allocable to the partnership’s
trade or business of trading securities, if the limited partner
does not materially participate.
Rev. Rul. 2008–13, page 518.
Performance-based compensation.This ruling holds that
compensation paid to an executive is not qualified perfor-
mance-based compensation for purposes of section 162(m) of
the Code, even if the compensation is paid upon the attainment
of the performance goal, if the plan agreement or contract pro-
vides for payment of compensation to an executive upon the
attainment of a performance goal or for (1) termination without
“cause” or for “good reason” or (2) voluntary retirement.
T.D. 9374, page 521.
REG–147290–05, page 576.
Final, temporary, and proposed regulations under section 468A
of the Code provide guidance regarding contributions to quali-
fied nuclear decommissioning trusts, including changes made
to that section by the Energy Policy Act of 2005.
Notice 2008–27, page 543.
This notice provides interim guidance to issuers of state and lo-
cal bonds to clarify when certain tax-exempt bonds are treated
as reissued or retired for purposes of section 103 and sec-
tions 141–150 of the Code. The notice modifies certain spe-
cial reissuance standards for qualified tender bonds under No-
tice 88–130, 1988–2 C.B. 543, and sets forth conditions un-
der which certain changes to the bonds will not result in the
bonds being reissued. The notice also clarifies the application
of regulations section 1.1001–3 to certain changes to the bond
terms, provides temporary relief for certain waivers of interest
rate caps, and provides limited guidance for certain modifica-
tions of qualified hedges for purposes of section 148 of the
Code.
Notice 2008–28, page 546.
This notice informs certain individuals not otherwise required to
file an income tax return how to request the economic stimulus
payment authorized by H.R. 5140, the Economic Stimulus Act
of 2008.
Rev. Proc. 2008–16, page 547.
Like-kind exchanges of rental property that is used for
personal purposes.This procedure provides a safe harbor
under which the Service will not challenge whether a property
that is rented to others but also occasionally used by the own-
ers for personal purposes qualifies as property that may be
exchanged in a like-kind exchange under section 1031 of the
Code.
(Continued on the next page)
Finding Lists begin on page ii.

EMPLOYEE PLANS
Rev. Rul. 2008–13, page 518.
Performance-based compensation.This ruling holds that
compensation paid to an executive is not qualified perfor-
mance-based compensation for purposes of section 162(m) of
the Code, even if the compensation is paid upon the attainment
of the performance goal, if the plan agreement or contract pro-
vides for payment of compensation to an executive upon the
attainment of a performance goal or for (1) termination without
“cause” or for “good reason” or (2) voluntary retirement.
ADMINISTRATIVE
Rev. Proc. 2008–16, page 547.
Like-kind exchanges of rental property that is used for
personal purposes.This procedure provides a safe harbor
under which the Service will not challenge whether a property
that is rented to others but also occasionally used by the own-
ers for personal purposes qualifies as property that may be
exchanged in a like-kind exchange under section 1031 of the
Code.
Rev. Proc. 2008–17, page 549.
This procedure provides issuers of qualified mortgage bonds
(QMBs) and qualified mortgage credit certificates (MCCs) with
average area purchase price safe harbors for statistical areas
in the United States and with a nationwide average purchase
price for residences in the United States for purposes of the
QMB rules under section 143 of the Code and the MCC rules
under section 25. Rev. Proc. 2007–26 obsoleted in part.
Rev. Proc. 2008–18, page 573.
The Small Business and Work Opportunity Act of 2007 added
section 1361(g) of the Code, which provides that, in the case
of a bank which changes from the reserve method of account-
ing for bad debts described in section 585 for its first taxable
year for which an election under section 1362(a) is in effect, the
bank may elect to take into account any adjustments under sec-
tion 481 by reason of such change for the taxable year immedi-
ately preceding such first taxable year. This procedure explains
how a bank may make the election under section 1361(g). Gen-
erally, the procedure is effective for taxable years beginning
after December 31, 2006. Rev. Proc. 2002–9 modified.
March 10, 20082008–10 I.R.B.

The IRS Mission
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a’s taxpayers top quality service by helping them
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Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conven-
tions, legislation, court decisions, and other items of general
interest. It is published weekly and may be obtained from the
Superintendent of Documents on a subscription basis. Bulletin
contents are compiled semiannually into Cumulative Bulletins,
which are sold on a single-copy basis.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application of
the tax laws, including all rulings that supersede, revoke, mod-
ify, or amend any of those previously published in the Bulletin.
All published rulings apply retroactively unless otherwise indi-
cated. Procedures relating solely to matters of internal man-
agement are not published; however, statements of internal
practices and procedures that affect the rights and duties of
taxpayers are published.
Revenue rulings represent the conclusions of the Service on the
application of the law to the pivotal facts stated in the revenue
ruling. In those based on positions taken in rulings to taxpayers
or technical advice to Service field offices, identifying details
and information of a confidential nature are deleted to prevent
unwarranted invasions of privacy and to comply with statutory
requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—19
86 Code.
This part i
ncludes rulings and decisions based on provisions of
the Intern
al Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B, Leg-
islation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rul-
ings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secre-
tary (Enforcement).
Part IV
.—Items of General Interest.
This par
t includes notices of proposed rulemakings, disbar-
ment an
d suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The c
ontents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
For sale by the Superintendent of Documents, U.S.Government Printing Office, Washington, DC 20402.
2008–10 I.R.B.March 10, 2008

March 10, 20082008–10 I.R.B.

Part I. Rulings
and Decisions Under the Internal Revenue Code
of 1986
Section 25.—I
nterest on
Certain Home M
ortgages
A revenue proc
edure provides issuers of qualified
mortgage bond
s, as defined in section 143(a) of the
Internal Reve
nue Code, and issuers of mortgage
credit certi
ficates, as defined in section 25(c), with
(1) the natio
nwide average purchase price for resi-
dences locat
ed in the United States, and (2) average
area purchas
e price safe harbors for residences lo-
cated in sta
tistical areas in each state, the District
of Columbia
, Puerto Rico, the Northern Mariana
Islands, Am
erican Samoa, the Virgin Islands, and
Guam. See Re
v. Proc. 2008-17, page 549.
Section 42.—Low-Income
Housing Credit
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of March 2008. See Rev. Rul. 2008-11, page 541.
Section 143.—Mortgage
Revenue B
onds: Qualified
Mortgage Bond and
Qualified Veterans’
Mortgage Bond
A revenue procedure provides issuers of qualified
mortgage bonds, as defined in section 143(a) of the
Internal Revenue Code, and issuers of mortgage
credit certificates, as defined in section 25(c), with
(1) the nationwide average purchase price for resi-
dences located in the United States, and (2) average
area purchase price safe harbors for residences lo-
cated in statistical areas in each state, the District
of Columbia, Puerto Rico, the Northern Mariana
Islands, American Samoa, the Virgin Islands, and
Guam. See Rev. Proc. 2008-17, page 549.
Sect
ion 162.—Trade or
Busi
ness Expenses
26 CF
R 1.162–27(e): Certain employee remunera-
tion
in excess of $1,000,000.
Perf
ormance-based compensation.
This
ruling holds that compensation paid
to a
n executive is not qualified perfor-
man
ce-based compensation for purposes
of s
ection162(m)oftheCode,evenifthe
com
pensation is paid upon the attainment
of t
he performance goal, if the plan agree-
men
t or contract provides for payment of
co
mpensation to an executive upon the
at
tainment of a performance goal or for
(1) terminati
on without “cause” or for
“good reason”
or (2) voluntary retirement.
Rev. Rul. 200
8–13
ISSUE
Is compensat
ion payable by a publicly
held corpor
ationtoacoveredemployee
(within the
meaning of § 162(m)(3) of the
Internal Re
venue Code) considered “re-
muneration
payable solely on account of
attainmen
t of one or more performance
goals” und
er § 162(m)(4)(C) if the plan or
agreement
under which the covered em-
ployee is p
aid provides that the compensa-
tion will b
e paid upon attainment of a per-
formance
goal and also provides that the
compensa
tion will be paid without regard
to whethe
r the performance goal is attained
in either
of the following situations: (i)
the cove
red employee’s employment is in-
volunta
rily terminated by the corporation
without
cause or the covered employee ter-
minates
his or her employment for good
reason,
or (ii) the covered employee re-
tires.
FACTS
Compan
y X is a publicly held corpora-
tion wi
thin the meaning of § 162(m)(2). X
maint
ains a bonus plan (Plan) that pays a
cash a
ward (Award) to covered employee
EifX’
s earnings per share do not decrease
durin
g the calendar year, determined on
Decem
ber 31, 2009 (Performance Goal).
In ac
cordance with § 1.162–27(e)(2) of
the I
ncome Tax Regulations, X’s compen-
sati
on committee established the Perfor-
manc
e Goal in writing within 90 days af-
ter t
he commencement of the period of ser-
vice
to which the Performance Goal re-
lat
es, and the Performance Goal satisfies
§1.
162–27(e)(2)(ii) and (iii). In 2009, X’s
ear
nings per share increase by seven per-
cen
t.
Sit
uation 1.
Th
e Plan provides that the Award will
be
paid to covered employee E if the Per-
fo
rmance Goal is attained. The Plan also
pr
ovides that, even if the Performance
Goal is not att
ained, the Award will be paid
if covered emp
loyee E dies or becomes
disabled, or i
f X experiences a change of
ownership or
control. In addition, the Plan
provides tha
ttheAwardwillbepaideven
if the Perfor
mance Goal is not attained if
covered empl
oyee E is terminated by X
without “ca
use” or if covered employee E
voluntaril
y terminates his or her employ-
ment with X f
or “good reason.”
The definit
ion of “cause” in the Plan
is (i) an act
of willful misrepresentation,
fraud or wil
lful dishonesty intended to re-
sult in sub
stantial personal enrichment at
the expens
e of X, (ii) willful misconduct
with regar
dtoXthatwasintendedtohave
a material
adverse impact on X, (iii) will-
ful or reck
less behavior that has a material
adverse i
mpact on X, (iv) willful failure to
perform d
uties or follow written direction
of the boa
rd of directors, or (v) conviction
of, or ple
adingnolo contendreor guilty to
afelony.
The definition of “cause” does
not incl
ude poor performance that does not
involve
one of the events described in the
precedi
ng sentence.
The defi
nition of “good reason” un-
der the P
lan is the occurrence of any of
the foll
owing, without the executive’s
expres
s written consent: (i) assignment
of duti
es materially inconsistent with the
execut
ive’s current authorities, duties, re-
sponsi
bilities, and status, any reduction in
the exe
cutive’s title, position, or report-
ing li
nes, or any material reduction in the
execu
tive’s status, authorities, duties, or
respo
nsibilities, (ii) relocation of the ex-
ecuti
ve from the principal office of X or
reloc
ation of the principal office of X, (iii)
redu
ction in the executive’s base salary,
(iv)
reduction in the executive’s overall
leve
l of participation in X incentive, ben-
efit
, or retirement plans, (v) failure of X
to ob
tain assumption of the executive’s
empl
oyment agreement from a successor
of X
, or (vi) any other material breach of
the
executive’s employment by X.
Sit
uation 2.
The
Plan provides that the Award will
be p
aid to covered employee E if the Per-
for
mance Goal is attained. The Plan also
pro
vides that the Award will be paid to
2008–10 I.R.B.518March 10, 2008

covered employee E, even if the Perfor-
mance Goal is not attained, if covered em-
ployee E dies or becomes disabled or if X
experiences a change of ownership or con-
trol. In addition, the Plan provides that the
Award will be paid to covered employee
E even if the Performance Goal is not at-
tained if covered employee E voluntarily
retires during the calendar year.
LAW
Section 162(a)(1) allows as a deduction
all the ordinary and necessary expenses
paid or incurred during the taxable year in
carrying on any trade or business, includ-
ing a reasonable allowance for salaries or
other compensation for personal services
actually rendered.
Section 162(m)(1) provides that in the
case of any publicly held corporation, no
deduction is allowed for applicable em-
ployee remuneration with respect to any
covered employee to the extent that the
amount of the remuneration for the taxable
year exceeds $1,000,000.
Section 162(m)(3) provides that the
term “covered employee” means any em-
ployee of the taxpayer if (i) as of the close
of the taxable year, such employee is the
chief executive officer of the taxpayer or
is an individual acting in such a capacity,
or (ii) the total compensation of such em-
ployee for the taxable year is required to be
reported to shareholders under the Secu-
rities Exchange Act of 1934 by reason of
such employee being among the 4 highest
compensated officers for the taxable year
(other than the chief executive officer).
Section 162(m)(4)(A)defines “applica-
ble employee remuneration,” with respect
to any covered employee for any taxable
year, generally as the aggregate amount al-
lowable as a deduction for the taxable year
(determined without regard to § 162(m))
for remuneration forservices performed
by the employee (whether or not during the
taxable year).
Section 162(m)(4)(C) provides that ap-
plicable employee remuneration does not
include any remuneration payable solely
on account of the attainment of one or
more performance goals, but only if (i)
the performance goals are determined by
a compensation committee of the board of
directors of the taxpayer which is com-
prised solely of 2 or more outside direc-
tors, (ii) the material terms under which the
remuneration is to be paid, including the
performance goals, are disclosed to share-
holders and approved by a majority of the
vote in a separate shareholder vote before
payment of such remuneration, and (iii)
before any payment of such remuneration,
the compensation committee referred to
in clause (i) certifies that the performance
goals and other material terms were in fact
satisfied.
Section 1.162–27(b) provides that
§ 162(m) precludes a deduction under
chapter 1 of the Internal Revenue Code
by any publicly held corporation for com-
pensation paid to any covered employee
to the extent that the compensation for the
taxable year exceeds $1,000,000. Section
1.162–27(e)(1) provides that the deduc-
tion limit in § 1.162–27(b) does not apply
to qualified performance-based compen-
sation. Section 1.162–27(e)(1) further
provides that qualified performance-based
compensation is compensation that meets
all of the requirements of § 1.162–27(e)(2)
through (5).
Section 1.162–27(e)(2)(i) provides, in
part, that qualified performance-based
compensation must be paid solely on ac-
count of the attainment of one or more
preestablished, objective performance
goals.
Section 1.162–27(e)(2)(v) provides
that compensation does not satisfy the
requirements of § 1.162–27(e)(2) if the
facts and circumstances indicate that the
employee would receive all or part of
the compensation regardless of whether
the performance goalis attained and that,
if the payment of compensation under
a grant or award is only nominally or
partially contingent on attaining a perfor-
mance goal, none of the compensation
payable under the grant or award will be
considered performance-based. Section
1.162–27(e)(2)(v) further provides that
compensation does not fail to be qualified
performance-based compensation merely
because the plan allows the compensation
to be payable upon death, disability, or
change of ownership or control, although
compensation actually paid on account of
those events prior to the attainment of the
performance goal would not satisfy the
requirements of § 1.162–27(e)(2).
The IRS and Treasury have not previ-
ously issued any guidance on which tax-
payers are entitled to rely that explicitly
addresses the situations described in this
revenue ruling.
ANALYSIS
Under § 162(m)(4)(C) and § 1.162–
27(e), compensation is not considered
applicable employee remuneration, and
thus is not subject to the $1,000,000
limit in § 162(m)(1), if it satisfies
the requirements for “qualified
performance-basedcompensation.”
Among these requirements is that
the compensation is payable “solely”
on account of the attainment of one
or more performance goals. Under
§ 1.162–27(e)(2)(v), compensation
is not performance-based if the facts
and circumstances indicate that the
employee would receive all or part of
the compensation regardless of whether
the performance goal is attained. Section
1.162–27(e)(2)(v) provides further that
compensation does not fail to be qualified
performance-based compensation merely
because the plan allows the compensation
to be payable upon death, disability, or
change of ownership or control.
Situation 1.
A covered employee’s termination
without “cause” or for “good reason” is
not listed as a permissible payment event
under § 1.162–27(e)(2)(v). As defined in
the Plan, involuntary termination without
“cause” may occur or a “good reason”
(e.g., a reduction in title or base salary)
may arise as a result of covered employee
E’s poor performance and failure to meet
the Performance Goal. Therefore, un-
der the facts and circumstances analysis,
the compensation is not “remuneration
payable solely on account of the attain-
ment of one or more performance goals,”
as required by § 162(m)(4)(C).
Situation 2.
Voluntary retirement is not listed
as a permissible payment event under
§ 1.162–27(e)(2)(v). Because retirement
generally is a voluntary action within the
control of the covered employee, the com-
pensation is not “remuneration payable
solely on account of the attainment of one
or more performance goals,” as required
by § 162(m)(4)(C).
March 10, 20085192008–10 I.R.B.

HOLDINGS
Situation 1.
The Award is not qualified per-
formance-based compensation under
§ 162(m)(4)(C) and § 1.162–27(e)(2).
Situation 2.
The Award is not qualified per-
formance-based compensation under
§ 162(m)(4)(C) and § 1.162–27(e)(2).
APPLICATION
Pursuant to § 7805(b)(8), the holdings
in this revenue ruling will not be applied
to disallow a deduction for any compen-
sation that otherwise satisfies the require-
ments for qualified performance-based
compensation under § 162(m)(4)(C) and
§ 1.162–27(e) and that is paid under a plan,
agreement, or contract that has payment
terms similar to the terms described in this
revenue ruling if either (i) the performance
period for such compensation begins on or
before January 1, 2009 or (ii) the compen-
sation is paid pursuant to the terms of an
employment contract as in effect (without
respect to future renewals or extensions,
including renewals or extensions that oc-
cur automatically absent further action of
one or more of the parties to the contract)
on February 21, 2008. For purposes of
the preceding sentence, the performance
period for such compensation is the period
of service to which the performance goal
applicable to such compensation relates.
The relief under this paragraph does not
extend to other issues under § 162(m) or
to any other provision of the Code.
DRAFTING INFORMATION
This revenue ruling was prepared by
Ken Griffin of the Office of the Division
Counsel/Associate Chief Counsel (Tax Ex-
empt & Government Entities). For further
information regarding this revenue ruling,
contact Mr. Griffin at (202) 622–6030 (not
a toll-free call).
Section 163.—Interest
(Also: Sections 469, 702, 703.)
Application of section 163(d) to lim-
ited partners in a trader partnership.
This ruling explains how section 163(d) of
the Code applies to a noncorporate limited
partner’s distributive share of the interest
expense allocable to the partnership’s trade
or business of trading securities, if the lim-
ited partner does not materially participate.
Rev. Rul. 2008–12
ISSUE
Is a noncorporate limited partner’s dis-
tributive share of partnership interest ex-
pense incurred in the trade or business of
trading securities bythe partnership sub-
ject to the limitation on the deduction of
investment interest in § 163(d) of the In-
ternal Revenue Code?
FACTS
PRS is a partnership that is engaged
solely in the trade or business of trading
securities for its own account and not for
customers. LP is a taxpayer other than a
corporation (a noncorporate taxpayer) that
owns an interest in PRS as a limited part-
ner. LP does not materially participate (as
that term is used in § 469) in the activity in
which PRS is engaged.
PRS incurs indebtedness in its trade or
business of trading securities. LP’s dis-
tributive share of the income, gain, loss,
deduction, or credit of PRS includes inter-
est expense incurred on this indebtedness.
LAW AND ANALYSIS
Section 703 provides that the taxable in-
come of a partnership is computed in the
same manner as an individual, except that
items described in § 702 must be sepa-
rately stated and certain deductions are not
allowed to the partnership.
Section 702(a)(7) provides that each
partner in determining its income tax is
required to take into account separately
its distributive share of the partnership
items of income, gain, loss, deductions,
and credits to the extent provided by reg-
ulations.
Under § 1.702–1(a)(8)(ii) of the In-
come Tax Regulations, each partner must
take into account separately its distributive
share of any partnership item that, if sep-
arately taken into account by any partner,
would result in an income tax liability for
that partner, or for any other person, dif-
ferent from that which would result if that
partner did not take the item into account
separately.
Section 1.702–1(b) provides that the
character in the hands of a partner of any
item of income, gain, loss, deduction or
credit is determined as if such item were
realized directly from the source from
which realized by the partnership or in-
curred in the same manner as incurred by
the partnership.
Section 163(a) provides that, in gen-
eral, a deduction is allowed for all inter-
est paid or accrued within the taxable year
on indebtedness. Section 163(h)(1) pro-
vides that a noncorporate taxpayer is not
entitled to a deduction for personal inter-
est paid or accrued during the taxable year.
Section 163(h)(2) provides that personal
interest does not include interest paid or
accrued on indebtedness properly alloca-
ble to a trade or business (other than the
trade or business of performing services as
an employee) or investment interest, as de-
fined in § 163(d).
Section 163(d)(1) provides that the
amount allowed as a deduction for invest-
ment interest for any taxable year by a
noncorporate taxpayer shall not exceed
the amount of the taxpayer’s net invest-
ment income for the taxable year. Section
163(d)(3)(A) provides that the term “in-
vestment interest” means any interest
allowable as a deduction that is paid or ac-
crued on indebtedness properly allocable
to property held for investment.
Section 163(d)(5)(A)(ii) provides that
the term “property held for investment”
shall include any interest held by a tax-
payer in an activity involving the conduct
of a trade or business that is not a passive
activity and with respect to which the tax-
payer does not materially participate. Un-
der § 163(d)(5)(C), the terms “activity”,
“passive activity”, and “materially partici-
pate” have the meanings given such terms
by § 469.
Section 1.469–1T(e)(6) provides that
an activity of trading personal property for
the account of owners of interests in the
activity is not a passive activity (without
regard to whether such activity is a trade
or business activity). The term “personal
property” has the meaning provided for
such term in § 1092(d) without regard to
paragraph (3) thereof.
Section 1.469–4(a) provides that a tax-
payer’s activity includes an activity con-
ducted through a partnership. Also, un-
2008–10 I.R.B.520March 10, 2008

der § 1.469–2T(c), an interest in an activity
includes both an interest in property used
in an activity and an interest in an activity
held through a partnership.
The trading business of PRS involves
the conduct of a trade or business which is
not a passive activity. Because LP does not
materially participate in the trading busi-
ness of PRS, LP’s interest in the trading
business of PRS is an interest in an activity
that is property held for investment within
the meaning of § 163(d)(5)(A)(ii).
Accordingly, because LP’s distributive
share of the interest paid or accrued on
the indebtedness of PRS is allocable to the
trading activity of PRS, it is investment
interest described in § 163(d)(3) and sub-
ject to the investment interest limitation in
§ 163(d)(1).
Because the degree of participation by
each noncorporate partner of PRS could
limit the deductibility of the interest ex-
pense allocable to its trading business,
PRS must separately state this expense.
HOLDING
A noncorporate limited partner’s dis-
tributive share of the interest expense on
indebtedness allocable to the partnership’s
trade or business of trading securities is in-
vestment interest described in § 163(d)(3)
and subject to the limitation on the deduc-
tion of investment interest in § 163(d)(1),
if the limited partner does not materially
participate in the trading activity.
DRAFTING INFORMATION
The principal author of this revenue rul-
ing is Faith P. Colson of the Office of
Associate Chief Counsel (Passthroughs &
Special Industries). For further informa-
tion regarding this revenue ruling, contact
Faith P. Colson at (202) 622–3060 (not a
toll-free call).
Section 280G.—Golden
Parachute Payments
Federal short-term, mid-term, and long-term rates
are set forth for the month of March 2008. See Rev.
Rul. 2008-11, page 541.
Section 382.—Limitation
on Net Operating Loss
Carryforwards and Certain
Built-In Losses Following
Ownership Change
The adjusted applicable federal long-term rate is
set forth for the month of March 2008. See Rev. Rul.
2008-11, page 541.
Section 412.—Minimum
Funding Standards
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of March 2008. See Rev. Rul. 2008-11, page 541.
Section 467.—Certain
Payments for the Use of
Property or Services
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of March 2008. See Rev. Rul. 2008-11, page 541.
Section 468.—Special
Rules for Mining and Solid
Waste Reclamation and
Closing Costs
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of March 2008. See Rev. Rul. 2008-11, page 541.
Section 468A.—Special
Rules for Nuclear
Decommissioning Costs
26 CFR 1.468A–1T: Nuclear decommissioning costs;
general rules (temporary).
T.D. 9374
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
Nuclear Decommissioning
Funds
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final and Temporary regula-
tion.
SUMMARY: This document contains
final and temporary regulations under sec-
tion 468A of the Internal Revenue Code
relating to deductions for contributions
to trusts maintained for decommissioning
nuclear power plants. The temporary reg-
ulations affect most taxpayers that own
an interest in a nuclear power plant and
reflect recent statutory changes. The text
of these temporary regulations also serves
as the text of the proposed regulations
(REG–147290–05) set forth in the notice
of proposed rulemaking on this subject in
this issue of the Bulletin.
DATES:Effective Date:These regulations
are effective on December 31, 2007.
Applicability Dates:For dates of appli-
cability, see §1.468A–9T.
FOR FURTHER INFORMATION
CONTACT: Patrick S. Kirwan, (202)
622–3110 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
These temporary regulations are being
issued without prior notice and public pro-
cedure pursuant to the Administrative Pro-
cedure Act (5 U.S.C. 553). For this reason,
the collections of information contained
in these regulations have been approved
by the Office of Management and Budget
on a temporary basis under control num-
ber 1545–2091 and pending receipt and re-
view of comments, may be approved for a
period of three years. Responses to these
collections of information are required to
obtain a tax benefit.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
For further information concerning this
collection of information, and where to
submit comments on the collection of in-
formation and the accuracy of the esti-
mated burden, and suggestions for reduc-
ing this burden, please refer to the pream-
ble of the cross-referencing notice of pro-
posed rulemaking published in this issue of
the Bulletin.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in
March 10, 20085212008–10 I.R.B.

the administration of any internal revenue
law. Generally, tax returns and tax return
information are confidential, as required
by 26 U.S.C. 6103.
Background
This document contains amendments to
26 CFR part 1 providing temporary reg-
ulations under section 468A of the Inter-
nal Revenue Code of 1986 (Code). Sec-
tion 468A was amended by section 1310
of the Energy Policy Act of 2005 (the En-
ergy Policy Act), Public Law 109–58 (119
Stat. 594).
Explanation of Provisions
Section 468A provides a deduction for
amounts contributed to a qualified nuclear
decommissioning reserve fund. Under
prior law, the deduction was limited to
the lesser of the amount included in the
utility’s cost of service for ratemaking
purposes or the ruling amount. As a re-
sult, only regulated utilities could take
advantage of section 468A. The Energy
Policy Act amendment of section 468A
eliminated the cost-of-service limitation.
Accordingly, decommissioning costs of an
unregulated nuclear power plant may now
be funded by deductible contributions to a
qualified nuclear decommissioning fund.
Under prior law, deductible contribu-
tions were also limited to the amount nec-
essary to fund the plant’s post–1983 nu-
clear decommissioning costs (determined
as if decommissioning costs accrued rat-
ably over the estimated useful life of the
plant). The Energy Policy Act amendment
of section 468A also eliminated this lim-
itation. Accordingly, taxpayers may now
fund the entire cost of decommissioning a
plant through a qualified nuclear decom-
missioning fund.
A plant’s pre-1984 nuclear decommis-
sioning costs can be funded by increasing
the annual deductible contributions over
the remaining useful life of the plant. In
addition, however, the Energy Policy Act
amendments to section 468A permit more
rapid funding of the pre-1984 costs. A
taxpayer may contribute, in a single tax-
able year, all or any portion of the amount
needed to fund pre-1984 nuclear decom-
missioning costs that have not been pre-
viously funded (a “special transfer”). A
special transfer is not deductible in full
in the year the contribution is made. In-
stead, the deduction is allowed ratably over
the remaining useful life of the nuclear
plant. Gain or loss is not recognized on any
special transfer, and the transferred assets
have a carryover basis.
Section 468A allows a deduction only
if the Internal Revenue Service has given
the taxpayer a schedule of ruling amounts
(that is, a schedule specifying the maxi-
mum deductible contribution that can be
made in each taxable year). The Energy
Policy Act amendments provide that the
taxpayer must obtain a new schedule of
ruling amounts when the Nuclear Regula-
tory Commission (NRC) extends the oper-
ating license of the plant.
Useful Life
The schedule of ruling amounts may not
provide for more rapid than level funding
over the estimated useful life of the nuclear
power plant. Also, as noted above, deduc-
tions for special transfers are allowed rat-
ably over the plant’s remaining useful life.
Under the current regulations, the useful
life of the plant begins on the first day of
the taxable year that includes the date that
the nuclear power plant begins commer-
cial operations, and ends on the last day of
the taxable year that includes the estimated
date on which the nuclear power plant will
no longer be included in the taxpayer’s
rate base for ratemaking purposes. The
proposed and temporary regulations retain
this general framework for plants that were
regulated by a public utility commission
(PUC) before January 1, 2006, and permit
the use of any reasonable method to deter-
mine the end of the estimated useful life
for all other plants. The current regulations
require adjustments to the estimated use-
ful life to reflect changes in PUC assump-
tions regarding useful life. The proposed
and temporary regulations eliminate this
requirement. Taxpayers will, however, be
permitted to establish that a change in the
plant’s useful life is appropriate and may
use the assumptions used in the most re-
cent ratemaking proceeding as support for
such a change.
Previously Excluded Amount
Section 468A(f) provides that the
amount of the special transfer with respect
to a nuclear power plant may not exceed
“the present value of the portion of the
total nuclear decommissioning costs with
respect to such nuclear power plant pre-
viously excluded for such nuclear power
plant under section 468A(d)(2)(A) as in
effect immediately before the date of the
enactment of [the Energy Policy Act].”
The legislative history (footnote 15 of
H. Rep. 109–45) provides the following
explanation of this rule:
For example, if $100 is the present
value of the total decommissioning
costs of a nuclear powerplant, and if
under present law the qualified fund
is only permitted to accumulate $75
of decommissioning costs over such
plant’s estimated life (because the qual-
ified fund was not in existence during
25 percent of the useful life of the nu-
clear powerplant), a taxpayer could
contribute $25 to the qualified fund
under this component of the provision.
The proposed and temporary regulations
permit taxpayers to compute the maximum
special transfer amount by (i) calculating
the present value of the future decom-
missioning liability and (ii) reducing that
present value by the amount of decommis-
sioning costs that, under the law in effect
before the enactment of the Energy Pol-
icy Act, could have been funded through
a qualified fund. For this purpose, the
amount of decommissioning costs that
could have been funded through a quali-
fied fund is determined by multiplying the
present value of the future decommission-
ing liability by the qualifying percentage
that, under the law in effect before the
enactment of the Energy Policy Act, was
used to determine the amount of decom-
missioning costs that could be funded
through a qualified fund.
Special Transfers of Property
Taxpayers may make special transfers
of property other than cash. The legislative
history (footnote 16 of H. Rep. 109–45)
includes the following discussion relating
to such transfers:
A taxpayer recognizes no gain or loss
on the contribution of property to a
qualified fund under this special rule.
The qualified fund will take a trans-
ferred (carryover) basis in such prop-
erty. Correspondingly, a taxpayer’s
deduction (over the estimated life of
the powerplant) is to be based on the
2008–10 I.R.B.522March 10, 2008

adjusted tax basis of the property con-
tributed rather than the fair market
value of such property.
Although the deduction for contributed
property is limited to the adjusted basis of
the property, the regulations provide that
the limitation on the amount of the special
transfer is applied using the fair market
value of the contributed property rather
than its basis. This rule is necessary to
prevent overfunding of the qualified fund.
Transfers to Related Persons
Although deductions for special trans-
fers are generally allowed ratably over the
plant’s remaining useful life, a special rule
applies if the fund is transferred before the
end of the remaining useful life. In that
case, the entire remaining deduction for the
special transfer is allowed in the year the
fund is transferred. This acceleration al-
lows the taxpayer to close its books on the
asset. We have been asked to provide guid-
ance on whether this acceleration would
apply in the case of a transaction that qual-
ifies for nonrecognition treatment (for ex-
ample, under section 351). The IRS and
Treasury believe that the acceleration ap-
plies but provides aninappropriate bene-
fit to a taxpayer that directly or indirectly
retains an interest in the plant. Conse-
quently, in the case of a transfer of a quali-
fied nuclear decommissioning fund to a re-
lated person, the regulations provide that
the transferee’s ruling amounts will be ad-
justed to the extent necessary to offset the
inappropriate benefit provided by the ac-
celeration of deductions.
Special Transfers in Multiple Taxable
Years
It may be necessary (for example, if as-
sets are held in funds with penalties for
early withdrawal) for taxpayers to spread
the special transfer across more than one
taxable year. The regulations provide that
contributions in multiple years are permis-
sible and include an example describing
a special transfer spread across multiple
years.
New Schedules of Ruling Amounts
Under prior law, only regulated utilities
could take advantage of section 468A and
the IRS could rely upon the PUC with
regulatory jurisdiction over the taxpayer
to ensure that accurate and reasonable
assumptions were used in calculating
decommissioning cost of service for pur-
poses of rate orders. Accordingly, the
existing regulations require the taxpayer to
use the PUC’s assumptions in calculating
the taxpayer’s schedule of ruling amounts
and to submit as part of the request for a
schedule of ruling amounts “a description
of the assumptions, estimates, and other
factors that were used” by “each public
utility commission that has determined the
amount of decommissioning costs to be
included in the taxpayer’s cost of service
for ratemaking purposes.”
Under current law, any taxpayer with an
interest in a nuclear power plant may main-
tain a qualified nuclear decommissioning
fund with respect to that interest, without
regard to whether the taxpayer is, or ever
has been, regulated by a PUC. The tempo-
rary and proposed regulations provide that,
in the case of a plant that is currently sub-
ject to PUC regulation, the assumptions
used by the PUC in determining decom-
missioning costs for the plant must be pro-
vided in the submission of the proposed
schedule of ruling amounts. The taxpayer
submitting the proposed schedule is not re-
quired to use the PUC’s assumptions in
calculating the proposed schedule, but is
required to base the schedule upon reason-
able assumptions.
Under the temporary and proposed
regulations, the electing taxpayer bears
the burden of demonstrating that the re-
quested schedule is based upon reasonable
assumptions and is consistent with the
principles and provisions of the appli-
cable regulatory provisions. A taxpayer
that remains subject to the ratemaking
jurisdiction of a PUC and that calculates
its schedule of ruling amounts using the
assumptions described by the PUC in
its most recent rate order will generally
satisfy this burden of proof. In addi-
tion, a taxpayer that owns an interest in
a deregulated nuclear plant may submit
assumptions used by a PUC that formerly
had regulatory jurisdiction over the plant
as support for the assumptions used in cal-
culating the taxpayer’s proposed schedule
of ruling amounts, with the understanding
that the PUC assumptions may be given
less weight if they are out of date or were
developed in a proceeding for a different
taxpayer. The use of other industry stan-
dards, such as the assumptions underlying
the taxpayer’s most recent financial assur-
ance filing with the NRC, is an alternative
means of demonstrating that the taxpayer
has calculated its proposed schedule of
ruling amounts on a reasonable basis. On
the other hand, consistency with financial
accounting statements is not sufficient, in
the absence of other supporting evidence,
to meet the taxpayer’s burden of proof.
Additional Provisions and Changes
The regulations follow the statute in
requiring taxpayers to request a new
schedule of ruling amounts in any taxable
year that the NRC extends the operating
license for the plant. In addition, the regu-
lations provide that a separate schedule of
ruling amounts (a “schedule of deduction
amounts”) must be obtained from the Sec-
retary before deductions may be claimed
with respect to a special transfer.
Finally, many conforming amend-
ments have been made to the existing
regulations reflecting the elimination of
the cost-of-service limitation and the
post–1983 decommissioning cost limita-
tion, and to eliminate obsolete provisions.
Effective/Applicability Date
The temporary regulations are appli-
cable on December 31, 2007, and apply
with respect to taxable years ending on or
after such date. During the period between
January 1, 2006, and December 31, 2007,
a taxpayer may use any reasonable method
consistent with the principles and provi-
sions of section 468A to determine the
schedule of ruling amounts or the sched-
ule of deduction amounts. A taxpayer
may apply the provisions of §§1.468A–1T
through 1.468A–8T to taxable years end-
ing on or after January 1, 2006, and be-
fore December 31, 2007, provided that
the taxpayer applies all provisions in
§§1.468A–1T through 1.468A–8T to the
taxable year.
Special Analyses
It has been determined that this Trea-
sury decision is not asignificant regula-
tory action as defined in Executive Order
12866. Therefore, a regulatory assessment
is not required. It also has been determined
that section 553(b) and (d) of the Admin-
istrative Procedure Act (5 U.S.C. chapter
5) does not apply to these regulations. For
March 10, 20085232008–10 I.R.B.

applicability of the Regulatory Flexibility
Act (5 U.S.C. chapter 6), please refer to the
Special Analyses section of the preamble
to the cross-reference notice of proposed
rulemaking published in this issue of the
Bulletin. Pursuant to section 7805(f) of
the Code, these regulations have been sub-
mitted to the Chief Counsel for Advocacy
of the Small BusinessAdministration for
comment on their impact on small busi-
ness.
Drafting Information
The principal author of these regula-
tions is Patrick S. Kirwan, Office of As-
sociate Chief Counsel (Passthroughs and
Special Industries). However, other per-
sonnel from the IRS and Treasury Depart-
ment participated in their development.
*****
Amendments to the Regulations
Accordingly, 26 CFR parts 1 and 602
are amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 is amended by adding an entry in
numerical order to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.468A–5T also issued under
26 U.S.C. 468A(e)(5). * * *
§§1.468A–0 through 1.468A–8[Re-
moved]
Par. 2. Sections 1.468A–0 through
1.468A–8 are removed.
Par. 3. Sections 1.468A–0T through
1.468A–9T are added to read as follows:
§1.468A–0T Nuclear decommissioning
costs; table of contents.
This section lists the paragraphs
contained in §§1.468A–1T through
1.468A–9T.
§1.468A–1T Nuclear decommissioning
costs; general rules (temporary).
(a) Introduction.
(b) Definitions.
(c) Special rules applicable to certain
experimental nuclear facilities.
§1.468A–2T Treatment of electing
taxpayer (temporary).
(a) In general.
(b) Limitation on payments to a nuclear
decommissioning fund.
(1) In general.
(2) Excess contributions not deductible.
(c) Deemed payment rules.
(d) Treatment of distributions.
(1) In general.
(2) Exceptions to inclusion in gross in-
come.
(i) Payment of administrative costs and
incidental expenses.
(ii) Withdrawals of excess contribu-
tions.
(iii) Actual distributions of amounts in-
cluded in gross income as deemed distri-
butions.
(e) Deduction when economic perfor-
mance occurs.
§1.468A–3T Ruling amount (temporary).
(a) In general.
(b) Level funding limitation.
(c) Funding period.
(d) Decommissioning costs allocable to
a fund.
(1) General rule.
(2) Total estimated cost of decommis-
sioning.
(3) Taxpayer’s share.
(e) Manner of requesting schedule of
ruling amounts.
(1) In general.
(2) Information required.
(3) Administrative procedures.
(f) Review and revision of schedule of
ruling amounts.
(1) Mandatory review.
(2) Elective review.
(3) Determination of revised schedule
of ruling amounts.
(g) Special rule permitting payments to
a nuclear decommissioning fund before re-
ceipt of an initial or revised ruling amount
applicable to a taxable year.
§1.468A–4T Treatment of nuclear
decommissioning fund (temporary).
(a) In general.
(b) Modified gross income.
(c) Special rules.
(1) Period for computation of modified
gross income.
(2) Gain or loss upon distribution of
property by a fund.
(3)Denialofcredits against tax.
(4) Other corporate taxes inapplicable.
(d) Treatment as corporation for pur-
poses of subtitle F.
§1.468A–5T Nuclear decommissioning
fund—miscellaneous provisions
(temporary).
(a) Qualification requirements.
(1) In general.
(2) Limitation on contributions.
(3) Limitation on use of fund.
(i) In general.
(ii) Definition of administrative costs
and expenses.
(4) Trust provisions.
(b) Prohibitions against self-dealing.
(1) In general.
(2) Self-dealing defined.
(3) Disqualified person defined.
(c) Disqualification of nuclear decom-
missioning fund.
(1) In general.
(2) Exception to disqualification.
(i) In general.
(ii) Excess contribution defined.
(iii) Taxation of income attributable to
an excess contribution.
(3) Effect of disqualification.
(4) Further effects of disqualification.
(d) Termination of nuclear decommis-
sioning fund upon substantial completion
of decommissioning.
(1) In general.
(2) Additional rules.
(3) Substantial completion of decom-
missioning defined.
§1.468A–6T Disposition of an interest in
a nuclear power plant (temporary).
(a) In general.
(b) Requirements.
(c) Tax consequences.
(1) The transferor and its Fund.
(2) The transferee and its Fund.
(3) Basis.
(d) Determination of proportionate
amount.
(e) Calculation of schedule of rul-
ing amounts and schedule of deduction
amounts for dispositions described in this
section.
(1) Transferor.
(i) Taxable year of disposition.
2008–10 I.R.B.524March 10, 2008

(ii) Taxable years after the disposition.
(2) Transferee.
(i) Taxable year of disposition.
(ii) Taxable years after the disposition.
(3) Example.
(f) Anti-abuse provision.
§1.468A–7T Manner of and time for
making election (temporary).
(a) In general.
(b) Required information.
§1.468A–8T Special transfers to qualified
funds pursuant to section 468A(f)
(temporary).
(a) General rule.
(1) In general.
(2) Previously excluded amount.
(3) Transfers in multiple years.
(4) Contributions of property.
(b) Deduction for amounts transferred.
(1) In general.
(2)Denialofdeductionforpreviously
deducted amounts.
(3) Transfers of qualified nuclear de-
commissioning funds.
(4) Special rules.
(i) Gain or loss not recognized on trans-
fers to fund.
(ii) Transfers of appreciated property to
fund.
(c) New ruling amount required.
(1) In general.
(2) Transfers in multiple taxable years.
(d) Manner of requesting schedule of
deduction amounts.
(1) In general.
(2) Information required.
(3) Statement required.
(4) Administrative procedures.
§1.468A–9T Effective/applicability date
and transitional rules (temporary).
(a) Effective date.
(b) Transitional rules.
(1) Schedules of ruling amounts based
on prior regulations.
(2) Nuclear decommissioning fund
qualification requirements.
(3) Use of formula method.
§1.468A–1T Nuclear decommissioning
costs; general rules (temporary).
(a)Introduction. Section 468A pro-
vides an elective method for taking into
account nuclear decommissioning costs
for Federal income tax purposes. In gen-
eral, an eligible taxpayer that elects the
application of section 468A pursuant to
the rules contained in §1.468A–7T is al-
lowed a deduction (as determined under
§1.468A–2T) for the taxable year in which
the taxpayer makes a cash payment to a
nuclear decommissioning fund. Taxpay-
ers using an accrual method of accounting
that do not elect the application of section
468A are not allowed a deduction for nu-
clear decommissioning costs prior to the
taxable year in which economic perfor-
mance occurs with respect to such costs
(see section 461(h)).
(b)Definitions. The following terms
are defined for purposes of section 468A
and the regulations:
(1) The termeligible taxpayermeans
any taxpayer that possesses a qualifying
interest in a nuclear power plant (includ-
ing a nuclear power plant that is under con-
struction).
(2) The termqualifying interest
means—
(i) A direct ownership interest; and
(ii) A leasehold interest in any portion
of a nuclear power plant if—
(A) The holder of the leasehold interest
is primarily liable under Federal or State
law for decommissioning such portion of
the nuclear power plant; and
(B) No other person establishes a nu-
clear decommissioning fund with respect
to such portion of the nuclear power plant.
(3) Adirect ownership interestincludes
an interest held as a tenant in common or
joint tenant, but does not include stock in
a corporation that owns a nuclear power
plant or an interest in a partnership that
owns a nuclear power plant. Thus, in
the case of a partnership that owns a nu-
clear power plant, the election under sec-
tion 468A must be made by the partner-
ship and not by the partners. In the case of
an unincorporated organization described
in §1.761–2(a)(3) that elects under section
761(a) to be excluded from the applica-
tion of subchapter K, each taxpayer that is
a co-owner of the nuclear power plant is
eligible to make a separate election under
section 468A.
(4) The termsnuclear decommissioning
fundandqualified nuclear decommission-
ing fundmean a fund that satisfies the re-
quirements of §1.468A–5T. The termnon-
qualified fundmeans a fund that does not
satisfy those requirements.
(5) The termnuclear power plant
means any nuclear power reactor that is
used predominantly in the trade or busi-
ness of the furnishing or sale of electric
energy. Each unit (that is, nuclear reactor)
located on a multi-unit site is a separate
nuclear power plant. The termnuclear
power plantalso includes the portion of
the common facilities of a multi-unit site
allocable to a unit on that site.
(6) The termnuclear decommissioning
costsordecommissioning costsmeans all
otherwise deductible expenses to be in-
curred in connection with the entombment,
decontamination, dismantlement, removal
and disposal of the structures, systems and
components of a nuclear power plant that
has permanently ceased the production of
electric energy. Such term includes all oth-
erwise deductible expenses to be incurred
in connection with the preparation for de-
commissioning, such as engineering and
other planning expenses, and all otherwise
deductible expenses to be incurred with re-
spect to the plant after the actual decom-
missioning occurs, such as physical se-
curity and radiation monitoring expenses.
Such term does not include otherwise de-
ductible expenses to be incurred in con-
nection with the disposal of spent nuclear
fuel under the Nuclear Waste Policy Act of
1982 (Public Law 97–425). An expense is
otherwise deductible for purposes of this
paragraph (b)(6) if it would be deductible
under chapter 1 of the Internal Revenue
Code without regard to section 280B.
(7) The termpublic utility commission
means any State or political subdivision
thereof, any agency, instrumentality or ju-
dicial body of the United States, or any ju-
dicial body, commission or other similar
body of the District of Columbia or of any
State or any political subdivision thereof
that establishes or approves rates for the
furnishing or sale of electric energy.
(8) The termratemaking proceeding
means any proceeding before a public
utility commission in which rates for the
furnishing or sale of electric energy are
established or approved. Such term in-
cludes a generic proceeding that applies
to two or more taxpayers that are subject
to the jurisdiction of a single public utility
commission.
(9) The term
special transfermeans
any transfer of funds to a qualified nu-
clear decommissioning fund pursuant to
§1.468A–8T.
March 10, 20085252008–10 I.R.B.

(c)Special rules applicable to certain
experimental nuclear facilities.(1)The
owner of a qualifying interest in an exper-
imental nuclear facility possesses a quali-
fying interest in a nuclear power plant for
purposes of paragraph (b) of this section if
such person is engaged in the trade or busi-
ness of the furnishing or sale of electric en-
ergy.
(2) An owner of stock in a corpora-
tion that owns an experimental nuclear fa-
cility possesses a qualifying interest in a
nuclear power plant for purposes of para-
graph (b)(1) of this section if—
(i) Such stockholder satisfies the con-
ditions of paragraph (c)(1) of this section;
and
(ii) The corporation that directly owns
the facility is not engaged in the trade or
business of the furnishing or sale of elec-
tric energy.
(3) For purposes of this paragraph (c),
an experimental nuclear facility is a nu-
clear power reactor that is used predom-
inantly for the purpose of conducting ex-
perimentation and research.
§1.468A–2T Treatment of electing
taxpayer (temporary).
(a)In general. An eligible taxpayer that
elects the application of section 468A pur-
suant to the rules contained in §1.468A–7T
(an electing taxpayer) is allowed a deduc-
tion for the taxable year in which the tax-
payer makes a cash payment (or is deemed
to make a cash payment as provided in
paragraph (c) of this section) to a nuclear
decommissioning fund and for any taxable
year in which a deduction is allowed for a
special transfer described in §1.468A–8T.
The amount of the deduction for any tax-
able year equals the total amount of cash
payments made (or deemed made) by the
electing taxpayer to a nuclear decommis-
sioning fund (or nuclear decommissioning
funds) during such taxable year under this
section, plus any amount allowable as a
deduction in that taxable year for a spe-
cial transfer described in §1.468A–8T. The
amount of a special transfer permitted un-
der §1.468A–8T is not treated as a cash
payment for purposes of this paragraph (a),
and a taxpayer making a special transfer is
allowed a ratable deduction in each taxable
year during the remaining useful life of the
nuclear power plant for the special transfer.
A payment may not be made (or deemed
made) to a nuclear decommissioning fund
before the first taxable year in which all of
the following conditions are satisfied:
(1) The construction of the nuclear
power plant to which the nuclear decom-
missioning fund relates has commenced.
(2) A ruling amount is applicable to
the nuclear decommissioning fund (see
§1.468A–3T).
(b)Limitation on payments to a nu-
clear decommissioning fund—(1)In gen-
eral. For purposes of paragraph (a) of this
section, the maximum amount of cash pay-
ments made (or deemed made) to a nu-
clear decommissioning fund under para-
graph (a) of this section during any taxable
year shall not exceed the ruling amount ap-
plicable to the nuclear decommissioning
fund for such taxable year (as determined
under §1.468A–3T).
(2)Excess contributions not deductible.
If the amount of cash payments made
(or deemed made) to a nuclear decom-
missioning fund during any taxable year
exceeds the limitation of paragraph (b)(1)
of this section, the excess is not deductible
by the electing taxpayer. In addition, see
§1.468A–5T(c) for rules which provide
that the Internal Revenue Service may dis-
qualify a nuclear decommissioning fund
if the amount of cash payments made (or
deemed made) to a nuclear decommission-
ing fund during any taxable year exceeds
the limitation of paragraph (b)(1) of this
section.
(3)Special transfer disregarded.The
amount of a special transfer permitted un-
der §1.468A–8T is not treated as a cash
payment for purposes of this paragraph (b).
(c)Deemed payment rules.(1)The
amount of any cash payment made by an
electing taxpayer to a nuclear decommis-
sioning fund on or before the 15th day of
the third calendar month after the close
of any taxable year (the deemed payment
deadline date) shall be deemed made dur-
ing such taxable year if the electing tax-
payer irrevocably designates the amount as
relating to such taxable year on its timely
filed Federal income tax return for such
taxable year (see §1.468A–7T(b)(4)(iv)
for rules relating to such designation).
(2) The amount of any cash payment
made by a customer of an electing taxpayer
to a nuclear decommissioning fund of such
electing taxpayer shall be deemed made by
the electing taxpayer if the amount is in-
cluded in the gross income of the electing
taxpayer in the manner prescribed by sec-
tion 88 and §1.88–1.
(d)Treatment of distributions—(1)In
general. Except as otherwise provided
in paragraph (d)(2) of this section, the
amount of any actual or deemed distri-
bution from a nucleardecommissioning
fund shall be included in the gross income
of the electing taxpayer for the taxable
year in which the distribution occurs. The
amount of any distribution of property
equals the fair market value of the prop-
erty on the date of the distribution. See
§1.468A–5T(c) and (d) for rules relating
to the deemed distribution of the assets
of a nuclear decommissioning fund in the
case of a disqualification or termination
of the fund. A distribution from a nuclear
decommissioning fund shall include an
expenditure from the fund or the use of the
fund’s assets—
(i) To satisfy, in whole or in part, the
liability of the electing taxpayer for de-
commissioning costs of the nuclear power
plant to which the fund relates; and
(ii) To pay administrative costs and
other incidental expenses of the fund.
(2)Exceptions to inclusion in gross in-
come—(i)Payment of administrative costs
and incidental expenses. The amount of
any payment by a nuclear decommission-
ing fund for administrative costs or other
incidental expenses of such fund (as de-
fined in §1.468A–5T(a)(3)(ii)) shall not be
included in the gross income of the elect-
ing taxpayer unless such amount is paid
to the electing taxpayer (in which case the
amount of the payment is included in the
gross income of the electing taxpayer un-
der section 61).
(ii)Withdrawals of excess contri-
butions. The amount of a withdrawal
of an excess contribution (as defined
in §1.468A–5T(c)(2)(ii)) by an elect-
ing taxpayer pursuant to the rules of
§1.468A–5T(c)(2) shall not be included in
the gross income of the electing taxpayer.
See paragraph (b)(2) of this section, which
provides that the payment of such amount
to the nuclear decommissioning fund is
not deductible by the electing taxpayer.
(iii)Actual distributions of amounts in-
cluded in gross income as deemed distri-
butions. If the amount of a deemed distri-
bution is included in the gross income of
the electing taxpayer for the taxable year in
which the deemed distribution occurs, no
further amount is required to be included
2008–10 I.R.B.526March 10, 2008

in gross income when the amount of the
deemed distribution isactually distributed
by the nuclear decommissioning fund. The
amount of a deemed distribution is actu-
ally distributed by a nuclear decommis-
sioning fund as the firstactual distributions
are made by the nuclear decommissioning
fund on or after the date of the deemed dis-
tribution.
(e)Deduction when economic per-
formance occurs. An electing taxpayer
using an accrual method of accounting
is allowed a deduction for nuclear de-
commissioning costs no earlier than the
taxable year in which economic perfor-
mance occurs with respect to such costs
(see section 461(h)(2)). The amount of
nuclear decommissioning costs that is
deductible under this paragraph (e) is de-
termined without regard to section 280B
(see §1.468A–1T(b)(6)). A deduction is
allowed under this paragraph (e) whether
or not a deduction was allowed with re-
spect to such costs under section 468A(a)
and paragraph (a) of this section for an
earlier taxable year.
§1.468A–3T Ruling amount (temporary).
(a)In general. (1) Except as other-
wise provided in paragraph (g) of this sec-
tion or in §1.468A–8T (relating to deduc-
tions for special transfers into a nuclear
decommissioning fund), an electing tax-
payer is allowed a deduction under sec-
tion 468A(a) for the taxable year in which
the taxpayer makes a cash payment (or
is deemed to make a cash payment) to a
nuclear decommissioning fund only if the
taxpayer has received a schedule of rul-
ing amounts for the nuclear decommis-
sioning fund that includes a ruling amount
for such taxable year. Except as provided
in paragraph (a)(4) or (5) of this section,
a schedule of ruling amounts for a nuclear
decommissioning fund (schedule of ruling
amounts) is a ruling (within the meaning
of §601.201(a)(2) of this chapter) specify-
ing the annual payments (ruling amounts)
that, over the taxable years remaining in
the funding period as of the date the sched-
ule first applies, will result in a projected
balance of the nuclear decommissioning
fund as of the last day of the funding pe-
riod equal to (and in no event greater than)
the amount of decommissioning costs allo-
cable to the fund. The projected balance of
a nuclear decommissioning fund as of the
last day of the funding period shall be cal-
culated by taking into account the fair mar-
ket value of the assets of the fund as of the
first day of the first taxable year to which
the schedule of ruling amounts applies and
the estimated rate of return to be earned
by the assets of the fund after payment
of the estimated administrative costs and
incidental expenses to be incurred by the
fund (as defined in §1.468A–5T(a)(3)(ii)),
including all Federal, State and local in-
come taxes to be incurred by the fund (the
after-tax rate of return). See paragraph (c)
of this section for a definition of funding
period and paragraph (d) of this section for
guidance with respect to the amount of de-
commissioning costs allocable to a fund.
(2) Each schedule of ruling amounts
must be consistent with the principles and
provisions of this section and must be
based on reasonable assumptions concern-
ing—
(i) The after-tax rate of return to be
earned by the amounts collected for de-
commissioning;
(ii) The total estimated cost of decom-
missioning the nuclear power plant (see
paragraph (d)(2) of this section); and
(iii) The frequency of contributions to
a nuclear decommissioning fund for a tax-
able year (for example, monthly, quarterly,
semi-annual or annual contributions).
(3) The Internal Revenue Service (IRS)
shall provide a schedule of ruling amounts
that is identical to the schedule of ruling
amounts proposed by the taxpayer in con-
nection with the taxpayer’s request for a
schedule of ruling amounts (see paragraph
(e)(2)(viii) of this section), but no schedule
of ruling amounts shall be provided unless
the taxpayer’s proposed schedule of ruling
amounts is consistent with the principles
and provisions of this section and is based
on reasonable assumptions. If a proposed
schedule of ruling amounts is not consis-
tent with the principles and provisions of
this section or is not based on reasonable
assumptions, the taxpayer may propose an
amended schedule of ruling amounts that
is consistent with such principles and pro-
visions and is based on reasonable assump-
tions.
(4) The taxpayer bears the burden of
demonstrating that the proposed schedule
of ruling amounts is consistent with the
principles and provisions of this section
and is based on reasonable assumptions. If
a public utility commission established or
approved the currentlyapplicable rates for
the furnishing or sale by the taxpayer of
electricity from the plant, the taxpayer can
generally satisfy this burden of proof by
demonstrating that the schedule of ruling
amounts is calculated using the assump-
tions used by the public utility commission
in its most recent order. In addition, a tax-
payer that owns an interest in a deregulated
nuclear plant may submit assumptions
used by a public utility commission that
formerly had regulatory jurisdiction over
the plant as support for the assumptions
used in calculating the taxpayer’s pro-
posed schedule of ruling amounts, with
the understanding that the assumptions
used by the public utility commission may
be given less weight if they are out of date
or were developed in a proceeding for a
different taxpayer. The use of other in-
dustry standards, such as the assumptions
underlying the taxpayer’s most recent fi-
nancial assurance filing with the NRC, are
an alternative means of demonstrating that
the taxpayer has calculated its proposed
schedule of ruling amounts on a reason-
able basis. Consistency with financial
accounting statements is not sufficient, in
the absence of other supporting evidence,
to meet the taxpayer’s burden of proof
under this paragraph (a)(4).
(5) The IRS will approve, at the request
of the taxpayer, a formula or method for
determining a schedule of ruling amounts
(rather than providing a schedule spec-
ifying a dollar amount for each taxable
year) if the formula or method is consis-
tent with the principles and provisions of
this section and is based on reasonable as-
sumptions. See paragraph (f)(1)(ii) of this
section for a special rule relating to the
mandatory review of ruling amounts that
are determined pursuant to a formula or
method.
(6) The IRS may, in its discretion, pro-
vide a schedule of ruling amounts that is
determined on a basis other than the rules
of paragraphs (a) through (d) of this sec-
tion if—
(i) In connection with its request for a
schedule of ruling amounts, the taxpayer
explains the need for special treatment and
sets forth an alternative basis for determin-
ing the schedule of ruling amounts; and
(ii) The IRS determines that special
treatment is consistent with the purpose of
section 468A.
March 10, 20085272008–10 I.R.B.

(b)Level funding limitation. (1) Except
as otherwise provided in paragraph (b)(3)
of this section, the ruling amount specified
in a schedule of ruling amounts for any tax-
able year in the funding period (as defined
in paragraph (c) of this section) shall not
be less than the ruling amount specified in
such schedule for any earlier taxable year.
(2) The ruling amount specified in a
schedule of ruling amounts for a taxable
year after the end of the funding period
may be less than the ruling amount speci-
fied in such schedule for an earlier taxable
year.
(3) The ruling amount specified in a
schedule of ruling amounts for the last tax-
able year in the funding period may be
less than the ruling amount specified in
such schedule for an earlier taxable year
if, when annualized, the amount specified
for the last taxable year is not less than the
amount specified for such earlier taxable
year. The amount specified for the last tax-
able year is annualized by—
(i) Determining the number of days be-
tween the beginningof the taxable year
and the end of the plant’s estimated useful
life;
(ii) Dividing the amount specified for
the last taxable year by such number of
days; and
(iii) Multiplying the result by the num-
ber of days in the last taxable year (gener-
ally 365).
(c)Funding period—(1)In general.
For purposes of this section, the funding
period for a nuclear decommissioning
fund is the period that—
(i) Begins on the first day of the
first taxable year for which a deductible
payment is made (or deemed made) to
such nuclear decommissioning fund (see
§1.468A–2T(a) for rules relating to the
first taxable year for which a payment may
be made (or deemed made) to a nuclear
decommissioning fund); and
(ii) Ends on the last day of the taxable
year that includes the last day of the es-
timated useful life of the nuclear power
plant to which the nuclear decommission-
ing fund relates.
(2)Estimated useful life. The last day
of the estimated useful life of a nuclear
power plant is determined under the fol-
lowing rules:
(i) Except as provided in paragraph
(c)(2)(ii) of this section—
(A) The last day of the estimated use-
ful life of a nuclear power plant that has
been included in ratebase for ratemak-
ing purposes in any ratemaking proceed-
ing that established rates for a period be-
fore January 1, 2006, is the date used in the
first such ratemaking proceeding as the es-
timated date on which the nuclear power
plant will no longer be included in the tax-
payer’s rate base for ratemaking purposes;
(B) The last day of the estimated use-
ful life of a nuclear power plant that is not
described in paragraph (c)(2)(i)(A) of this
section is the last day of the estimated use-
ful life of the plant determined as of the
date it is placed in service;
(C) A taxpayer with an interest in the
plant that is not described in paragraph
(c)(2)(i)(A) of this section may use any
reasonable method for determining the last
day of such estimated useful life; and
(D) A reasonable method for purposes
of paragraph (c)(2)(i)(C) of this section
may include use of the period for which
a public utility commission has included
a comparable nuclear power plant in rate
base for ratemaking purposes.
(ii) If it can be established that the es-
timated useful life of the nuclear power
plant will end on a date other than the
date determined under paragraph (c)(2)(i)
of this section, the taxpayer may use
such other date as the last day of the es-
timated useful life but is not required to
do so. If the last day of the estimated
useful life was determined under para-
graph (c)(2)(i)(A) of this section and the
most recent ratemaking proceeding used
an alternative date as the estimated date
on which the nuclear power plant will no
longer be included rate base, the most re-
cent ratemaking proceeding will generally
be treated as establishing such alternative
date as the last day of the estimated useful
life.
(d)Decommissioning costs allocable to
afund. The amount of decommissioning
costs allocable to a nuclear decommission-
ing fund is determined for purposes of this
section by applying the following rules and
definitions:
(1)General rule. The amount of de-
commissioning costs allocable to a nuclear
decommissioning fund is the taxpayer’s
share of the total estimated cost of de-
commissioning the nuclear power plant to
which the fund relates.
(2)Total estimated cost of decommis-
sioning. Under paragraph (a)(2) of this
section, the taxpayer must demonstrate
the reasonableness of the assumptions
concerning the total estimated cost of de-
commissioning the nuclear power plant.
(3)Taxpayer’s share. The taxpayer’s
share of the total estimated cost of decom-
missioning a nuclear power plant equals
the total estimated cost of decommission-
ing such nuclear power plant multiplied by
the percentage of such nuclear power plant
that the qualifying interest of the taxpayer
represents (see §1.468A–1T(b)(2) for cir-
cumstances in which a taxpayer possesses
a qualifying interest in a nuclear power
plant).
(e)Manner of requesting schedule of
ruling amounts—(1)In general.(i)Inor-
der to receive a ruling amount for any tax-
able year, a taxpayer must file a request for
a schedule of ruling amounts that complies
with the requirements of this paragraph (e),
the applicable procedural rules set forth in
§601.201(e) of this chapter (Statement of
Procedural Rules) and the requirements of
any applicable revenue procedure that is in
effect on the date the request is filed.
(ii) A separate request for a schedule
of ruling amounts is required for each
nuclear decommissioning fund estab-
lished by a taxpayer (see paragraph (a) of
§1.468A–5T for rules relating to the num-
ber of nuclear decommissioning funds that
a taxpayer can establish).
(iii) Except as provided by
§§1.468A–5T(a)(1)(iv) (relating to certain
unincorporated organizations that may be
taxable as corporations) and 1.468A–8T
(relating to a special transfer under section
468A(f)(1)), a request for a schedule of
ruling amounts must not contain a request
for a ruling on any other issue, whether
the issue involves section 468A or another
section of the Internal Revenue Code.
(iv) In the case of an affiliated group
of corporations that join in the filing of a
consolidated return, the common parent of
the group may request a schedule of ruling
amounts for each member of the group that
possesses a qualifying interest in the same
nuclear power plant by filing a single sub-
mission with the IRS.
(v) The IRS shall not provide or re-
vise a ruling amount applicable to a tax-
able year in response to a request for a
schedule of ruling amounts that is filed af-
ter the deemed payment deadline date (as
2008–10 I.R.B.528March 10, 2008

defined in §1.468A–2T(c)(1)) for such tax-
able year. In determining the date when a
request is filed, the principles of sections
7502 and 7503 shall apply.
(vi) Except as provided in paragraph
(e)(1)(vii) of this section, a request for a
schedule of ruling amounts shall be con-
sidered filed only if such request complies
substantially with the requirements of this
paragraph (e).
(vii) If a request does not comply sub-
stantially with the requirements of this
paragraph (e), the IRS will notify the
taxpayer of that fact. If the information
or materials necessary to comply sub-
stantially with the requirements of this
paragraph (e) are provided to the IRS
within 30 days after this notification, the
request will be considered filed on the date
of the original submission. In addition,
the request will be considered filed on the
date of the original submission in a case
in which the information and materials
are provided more than 30 days after the
notification if the IRS determines that the
electing taxpayer made a good faith ef-
fort to provide the applicable information
or materials within 30 days after notifi-
cation and also determines that treating
the request as filed on the date of the
original submission is consistent with the
purposes of section 468A. In any other
case in which the information or materials
necessary to comply substantially with the
requirements of this paragraph (e) are not
provided within 30 days after the notifica-
tion, the request will be considered filed on
the date that all information or materials
necessary to comply with the requirements
of this paragraph (e) are provided.
(2)Information required. A request for
a schedule of ruling amounts must contain
the following information:
(i) The taxpayer’s name, address, and
taxpayer identification number.
(ii) Whether the request is for an initial
schedule of ruling amounts, a mandatory
review of the schedule of ruling amounts
(see paragraph (f)(1) of this section), or an
elective review of the schedule of ruling
amounts (see paragraph (f)(2) of this sec-
tion).
(iii) The name and location of the nu-
clear power plant with respect to which a
schedule of ruling amounts is requested.
(iv) A description of the taxpayer’s
qualifying interest in the nuclear power
plant and the percentage of such nuclear
power plant that the qualifying interest of
the taxpayer represents.
(v) Where applicable, an identification
of each public utility commission that es-
tablishes or approves rates for the furnish-
ing or sale by the taxpayer of electric en-
ergy generated by the nuclear power plant,
and, for each publicutility commission
identified—
(A) Whether the public utility commis-
sion has determined the amount of decom-
missioning costs to be included in the tax-
payer’s cost of service for ratemaking pur-
poses;
(B) The amount of decommissioning
costs that are to be included in the tax-
payer’s cost of service for each taxable
year under the current determination and
amounts that otherwise are required to be
included in the taxpayer’s income under
section 88 and the regulations;
(C) A description of the assumptions,
estimates and other factors used by the
public utility commission to determine the
amount of decommissioning costs;
(D) A copy of such portions of any or-
der or opinion of the public utility commis-
sion as pertain to the public utility com-
mission’s most recent determination of the
amount of decommissioning costs to be in-
cluded in cost of service; and
(E) A copy of each engineering or cost
study that was relied on or used by the
public utility commission in determining
the amount of decommissioning costs to be
included in the taxpayer’s cost of service
under the current determination.
(vi) A description of the assumptions,
estimates and other factors that were used
by the taxpayer to determine the amount of
decommissioning costs, including each of
the following if applicable:
(A) A description of the proposed
method of decommissioning the nuclear
power plant (for example, prompt re-
moval/dismantlement, safe storage en-
tombment with delayed dismantlement,
or safe storage mothballing with delayed
dismantlement).
(B) The estimated year in which sub-
stantial decommissioning costs will first
be incurred.
(C) The estimated year in which the
decommissioning of the nuclear power
plant will be substantially complete (see
§1.468A–5T(d)(3) for a definition of sub-
stantial completion of decommissioning).
(D) The total estimated cost of decom-
missioning expressed in current dollars
(that is, based on price levels in effect at
the time of the current determination).
(E) The total estimated cost of decom-
missioning expressed in future dollars
(that is, based on anticipated price levels
when expenses are expected to be paid).
(F) For each taxable year in the pe-
riod that begins with the year specified
in paragraph (e)(2)(vi)(B) of this section
(the estimated year in which substantial
decommissioning costs will first be in-
curred) and ends with the year specified
in paragraph (e)(2)(vi)(C) of this section
(the estimated year in which the estimated
year in which the decommissioning of the
nuclear power plant will be substantially
complete), the estimated cost of decom-
missioning expressed in future dollars.
(G) A description of the methodology
used in converting the estimated cost of de-
commissioning expressed in current dol-
lars to the estimated cost of decommission-
ing expressed in future dollars.
(H) The assumed after-tax rate of return
to be earned by the amounts collected for
decommissioning.
(I) A copy of each engineering or cost
study that was relied on or used by the
taxpayer in determining the amount of de-
commissioning costs.
(vii) A proposed schedule of ruling
amounts for each taxable year remaining
in the funding period as of the date the
schedule of ruling amounts will first apply.
(viii) A description of the assumptions,
estimates and other factors that were used
in determining the proposed schedule of
ruling amounts, including each of the fol-
lowing if applicable—
(A) The funding period (as such term is
defined in paragraph (c) of this section);
(B) The assumed after-tax rate of return
to be earned by the assets of the nuclear
decommissioning fund;
(C) The fair market value of the assets
(if any) of the nuclear decommissioning
fund as of the first day of the first tax-
able year to which the schedule of ruling
amounts will apply;
(D) The amount expected to be earned
by the assets of the nuclear decommission-
ing fund (based on the after-tax rate of re-
turn applicable to the fund) over the period
that begins on the first day of the first tax-
able year to which the schedule of ruling
March 10, 20085292008–10 I.R.B.

amounts will apply and ends on the last day
of the funding period;
(E) The amount of decommissioning
costs allocable to the nuclear decommis-
sioning fund (as determined under para-
graph (d) of this section);
(F) The total estimated cost of decom-
missioning (as determined under para-
graph (d)(2) of this section); and
(G) The taxpayer’s share of the total es-
timated cost of decommissioning (as such
term is defined in paragraph (d)(3) of this
section).
(ix) If the request is for a revised sched-
ule of ruling amounts, the after-tax rate
of return earned by the assets of the nu-
clear decommissioning fund for each tax-
able year in the period that begins with the
date of the initial contribution to the fund
and ends with the first day of the first tax-
able year to which the revised schedule of
ruling amounts applies.
(x) If applicable, an explanation of the
need for a schedule of ruling amounts de-
termined on a basis other than the rules of
paragraphs (a) through (d) of this section
and a description of an alternative basis for
determining a schedule of ruling amounts
(see paragraph (a)(5) of this section).
(xi) A chart or table, based upon the as-
sumed after-tax rate of return to be earned
by the assets of the nuclear decommission-
ing fund, setting forth the years the fund
will be in existence, the annual contribu-
tion to the fund, the estimated annual earn-
ings of the fund and the cumulative total
balance in the fund.
(xii) If the request is for a revised
schedule of ruling amounts, a copy of the
schedule of ruling amounts that the revised
schedule would replace.
(xiii) If the request for a schedule of
ruling amounts contains a request, pur-
suant to §1.468A–5T(a)(1)(iv), that the
IRS rule whether an unincorporated or-
ganization through which the assets of the
fund are invested is an association taxable
as a corporation for Federal tax purposes,
a copy of the legal documents establishing
or otherwise governing the organization.
(xiv) Any other information required
by the IRS that may be necessary or use-
ful in determining the schedule of ruling
amounts.
(3)Administrative procedures.TheIRS
may prescribe administrative procedures
that supplement the provisions of para-
graph (e)(1) and (2) of this section. In ad-
dition, the IRS may, in its discretion, waive
the requirements of paragraph (e)(1) and
(2) of this section under appropriate cir-
cumstances.
(f)Review and revision of schedule
of ruling amounts—(1)Mandatory re-
view. (i) Any taxpayer that has obtained
a schedule of ruling amounts pursuant to
paragraph (e) of this section must file a
request for a revised schedule of ruling
amounts on or before the deemed payment
deadline date for the 10th taxable year that
begins after the taxable year in which the
most recent schedule of ruling amounts
was received. If the taxpayer calculated
its most recent schedule of ruling amounts
on any basis other than an order issued by
a public utility commission, the taxpayer
must file a request for a revised schedule
of ruling amounts on or before the deemed
payment deadline date for the 5th taxable
year that begins after the taxable year in
which the most recent schedule of ruling
amounts was received.
(ii)(A) Any taxpayer that has obtained
a formula or method for determining a
schedule of ruling amounts for any taxable
year under paragraph (a)(4)ofthissection
must file a request for a revised schedule
on or before the earlier of the deemed pay-
ment deadline for the 5th taxable year that
begins after its taxable year in which the
most recent formula or method was ap-
proved or the deemed payment deadline
for the first taxable year that begins after
a taxable year in which there is a substan-
tial variation in the ruling amount deter-
mined under the most recent formula or
method. There is a substantial variation
in the ruling amount determined under the
formula or method in effect for a taxable
year if the ruling amount for the year and
the ruling amount for any earlier year since
the most recent formula or method was ap-
proved differ by more than 50 percent of
the smaller amount.
(B) Any taxpayer that has determined
its ruling amount for any taxable year un-
der a formula prescribed by §1.468A–6T
(which prescribes ruling amounts for the
taxable year in which there is a disposi-
tion of a qualifying interest in a nuclear
power plant) must file a request for a re-
vised schedule of ruling amounts on or be-
fore the deemed payment deadline for its
first taxable year that begins after the dis-
position.
(iii) A taxpayer requesting a schedule
of deduction amounts for a nuclear decom-
missioning fund under §1.468A–8T must
also request a revised schedule of ruling
amounts for the fund. The revised sched-
ule of ruling amounts must apply begin-
ning with the first taxable year for which
a deduction is allowed under the schedule
of deduction amounts.
(iv) If the operating license of the nu-
clear power plant to which a nuclear de-
commissioning fund relates is renewed,
the taxpayer maintaining the fund must re-
quest a revised schedule of ruling amounts.
The request for the revised schedule must
be submitted on or before the deemed pay-
ment deadline for the taxable year that in-
cludes the date on which the operating li-
cense is renewed.
(v) A request for a schedule of ruling
amounts required by this paragraph (f)(1)
must be made in accordance with the rules
of paragraph (e) of this section. If a tax-
payer does not properly file a request for
a revised schedule of ruling amounts by
the date provided in paragraph (f)(1) (i),
(ii) or (iv) of this section (whichever is ap-
plicable), the taxpayer’s ruling amount for
the first taxable year to which the revised
schedule of ruling amounts would have ap-
plied and for all succeeding taxable years
until a new schedule is obtained shall be
zero dollars, unless, in its discretion, the
IRS provides otherwise in such new sched-
ule of ruling amounts. Thus, if a taxpayer
is required to request a revised schedule of
ruling amounts under any provision of this
section, and each ruling amount in the re-
vised schedule would equal zero dollars,
the taxpayer may, instead of requesting
a new schedule of ruling amounts, begin
treating the ruling amounts under its most
recent schedule as equal to zero dollars.
(2)Elective review. Any taxpayer that
has obtained a schedule of ruling amounts
pursuant to paragraph (e) of this section
can request a revised schedule of ruling
amounts. Such a request must be made
in accordance with the rules of paragraph
(e) of this section; thus, the IRS will not
provide a revised ruling amount applicable
to a taxable year in response to a request
for a schedule of ruling amounts that is
filed after the deemed payment deadline
date for such taxable year (see paragraph
(e)(1)(vi) of this section).
(3)Determination of revised schedule
of ruling amounts. A revised schedule
2008–10 I.R.B.530March 10, 2008

of ruling amounts for a nuclear decom-
missioning fund shall be determined under
this section without regard to any sched-
ule of ruling amounts for such nuclear de-
commissioning fund that was issued prior
to such revised schedule. Thus, a rul-
ing amount specified in a revised sched-
ule of ruling amounts for any taxable year
in the funding period can be less than one
or more ruling amounts specified in a prior
schedule of ruling amounts for a prior tax-
able year.
(g)Special rule permitting payments to
a nuclear decommissioning fund before re-
ceipt of an initial or revised ruling amount
applicable to a taxable year.(1)Ifan
electing taxpayer has filed a timely request
for an initial or revised ruling amount for
a taxable year beginning on or after Jan-
uary 1, 2006, and does not receive the rul-
ing amount on or before the deemed pay-
ment deadline date for such taxable year,
the taxpayer may make a payment to a
nuclear decommissioning fund on the ba-
sis of the ruling amount proposed in the
taxpayer’s request. Thus, under the pre-
ceding sentence, an electing taxpayer may
make a payment to a nuclear decommis-
sioning fund for such taxable year that
does not exceed the ruling amount pro-
posed by the taxpayer for such taxable year
in a timely filed request for a schedule of
ruling amounts.
(2) If an electing taxpayer makes a pay-
ment to a nuclear decommissioning fund
for any taxable year pursuant to paragraph
(g)(1) of this section and the ruling amount
that is provided by the IRS is greater than
the ruling amount proposed by the tax-
payer for such taxable year, the taxpayer
is not allowed to make an additional pay-
ment to the fund for such taxable year after
the deemed payment deadline date for such
taxable year.
(3) If the payment that an electing tax-
payer makes to a nuclear decommissioning
fund for any taxable year pursuant to para-
graph (g)(1) of this section exceeds the rul-
ing amount that is provided by the IRS for
such taxable year, the following rules ap-
ply:
(i) The amount of the excess is
an excess contribution (as defined in
§1.468A–5T(c)(2)(ii)) for such taxable
year.
(ii) The amount of the excess
contribution is not deductible (see
§1.468A–2T(b)(2)) and must be with-
drawn by the taxpayer pursuant to the
rules of §1.468A–5T(c)(2)(i).
(iii) The taxpayer must withdraw the af-
ter-tax earnings on the excess contribution.
(iv) If the taxpayer claimed a deduction
for the excess contribution, the taxpayer
should file an amendedreturnforthetax-
able year.
§1.468A–4T Treatment of nuclear
decommissioning fund (temporary).
(a)In general. A nuclear decommis-
sioning fund is subject to tax on all of its
modified gross income (as defined in para-
graph (b) of this section). The rate of tax is
20 percent for taxable years beginning af-
ter December 31, 1995. This tax is in lieu
of any other tax that may be imposed under
subtitle A of the Internal Revenue Code
(Code) on the income earned by the assets
of the nuclear decommissioning fund.
(b)Modified gross income. For pur-
poses of this section, the termmodified
gross incomemeans gross income as de-
fined under section 61 computed with the
following modifications:
(1) The amount of any payment or spe-
cial transfer to the nuclear decommission-
ing fund with respect to which a deduc-
tion is allowed under section 468A(a) or
section 468A(f) is excluded from gross in-
come.
(2) A deduction is allowed for the
amount of administrative costs and other
incidental expenses of the nuclear decom-
missioning fund (including taxes, legal
expenses, accounting expenses, actuarial
expenses and trustee expenses, but not
including decommissioning costs) that
are otherwise deductible and that are paid
by the nuclear decommissioning fund to
any person other than the electing tax-
payer. An expense is otherwise deductible
for purposes of this paragraph (b)(2) if it
would be deductible under chapter 1 of the
Code in determining the taxable income of
a corporation. For example, because Fed-
eral income taxes are not deductible under
chapter 1 of the Code in determining the
taxable income of a corporation, the tax
imposed by section 468A(e)(2) and para-
graph (a) of this section is not deductible
in determining the modified gross income
of a nuclear decommissioning fund. Sim-
ilarly, because certain expenses allocable
to tax-exempt interest income are not de-
ductible under section 265 in determining
the taxable income of a corporation, such
expenses are not deductible in determining
the modified gross income of a nuclear
decommissioning fund.
(3) A deduction is allowed for the
amount of an otherwise deductible loss
that is sustained by the nuclear decommis-
sioning fund in connection with the sale,
exchange or worthlessness of any invest-
ment. A loss is otherwise deductible for
purposes of this paragraph (b)(3) if such
loss would be deductible by a corporation
under section 165(f) or (g) and sections
1211(a) and 1212(a).
(4) A deduction is allowed for the
amount of an otherwise deductible net op-
erating loss of the nuclear decommission-
ing fund. For purposes of this paragraph
(b), the net operating loss of a nuclear
decommissioning fund for a taxable year
is the amount by which the deductions
allowable under paragraph (b)(2) and (3)
of this section exceed the gross income of
the nuclear decommissioning fund com-
puted with the modification described in
paragraph (b)(1) of this section. A net
operating loss is otherwise deductible for
purposes of this paragraph (b)(4) if such a
net operating loss would be deductible by
a corporation under section 172(a).
(c)Special rules—(1)Period for com-
putation of modified gross income.The
modified gross income of a nuclear de-
commissioning fund must be computed on
the basis of the taxable year of the electing
taxpayer. If an electing taxpayer changes
its taxable year, each nuclear decommis-
sioning fund of the electing taxpayer must
change to the new taxable year. See sec-
tion 442 and §1.442–1 for rules relating to
the change to a new taxable year.
(2)Gain or loss upon distribution of
property by a fund. A distribution of
property by a nuclear decommissioning
fund (whether an actual distribution or a
deemed distribution) shall be considered
a disposition of property by the nuclear
decommissioning fund for purposes of
section 1001. In determining the amount
of gain or loss from such disposition, the
amount realized by the nuclear decommis-
sioning fund shall be the fair market value
of the property on the date of disposition.
(3)Denial of credits against tax.The
tax imposed on the modified gross income
of a nuclear decommissioning fund under
paragraph (a) of this section is not to be
reduced or offset by any credits against
March 10, 20085312008–10 I.R.B.

taxprovidedbypartIVofsubchapterAof
chapter 1 of the Code other than the credit
provided by section 31(c) for amounts
withheld under section 3406 (back-up
withholding).
(4)Other corporate taxes inapplicable.
Although the modified gross income of
a nuclear decommissioning fund is sub-
ject to tax at the rate specified by section
468A(e)(2) and paragraph (a) of this sec-
tion, a nuclear decommissioning fund is
not subject to the other taxes imposed on
corporations under subtitle A of the Code.
For example, a nuclear decommissioning
fund is not subject to the alternative mini-
mum tax imposed by section 55, the accu-
mulated earnings tax imposed by section
531, the personal holding company tax im-
posed by section 541, and the alternative
tax imposed on a corporation under section
1201(a).
(d)Treatment as corporation for pur-
poses of subtitle F. For purposes of subtitle
F of the Code and the regulations, a nuclear
decommissioning fund is to be treated as if
it were a corporation and the tax imposed
by section 468A(e)(2) and paragraph (a) of
this section is to be treated as a tax imposed
by section 11. Thus, for example, the fol-
lowing rules apply:
(1) A nuclear decommissioning fund
must file a return with respect to the tax
imposedbysection468A(e)(2)andpara-
graph (a) of this section for each taxable
year (or portion thereof) that the fund is
in existence even though no amount is in-
cluded in the gross income of the fund for
such taxable year. The return is to be made
on Form 1120–ND in accordance with the
instructions relating to such form. For pur-
poses of this paragraph (d)(1), a nuclear
decommissioning fund is in existence for
the period that—
(i) Begins on the date that the first de-
ductible payment is actually made to such
nuclear decommissioning fund; and
(ii) Ends on the date of termination (see
§1.468A–5T(d)), the date that the entire
fund is disqualified(see §1.468A–5T(c)),
or the date that the electing taxpayer dis-
poses of its entire qualifying interest in the
nuclear power plant to which the nuclear
decommissioning fund relates (other than
in connection with the transfer of the entire
fund to the person acquiring such interest),
whichever is applicable.
(2) For each taxable year of the nu-
clear decommissioning fund, the return de-
scribed in paragraph (d)(1) of this section
must be filed on or before the 15th day
of the third month following the close of
such taxable year unless the nuclear de-
commissioning fund is granted an exten-
sion of time for filing under section 6081.
If such an extension is granted for any tax-
able year, the return for such taxable year
must be filed on or before the extended due
date for such taxable year.
(3) A nuclear decommissioning fund
must provide its employer identification
number on returns, statements and other
documents as required by the forms and in-
structions relating thereto. The employer
identification number is obtained by filing
aFormSS–4,Application for Employer
Identification Number, in accordance with
the instructions relating thereto.
(4) A nuclear decommissioning fund
must deposit all payments of tax imposed
by section 468A(e)(2) and paragraph (a)
of this section (including any payments
of estimated tax) with an authorized gov-
ernment depositary in accordance with
§1.6302–1.
(5) A nuclear decommissioning fund is
subject to the addition to tax imposed by
section 6655 in case of a failure to pay esti-
mated income tax. For purposes of section
6655 and this section—
(i) The tax with respect to which the
amount of the underpayment is computed
in the case of a nuclear decommission-
ing fund is the tax imposed by section
468A(e)(2) and paragraph (a) of this sec-
tion; and
(ii) The taxable income with respect to
which the nuclear decommissioning fund’s
status as a large corporation is measured
is modified gross income (as defined by
paragraph (b) of this section).
§1.468A–5T Nuclear decommissioning
fund qualification requirements;
prohibitions against self-dealing;
disqualification of nuclear
decommissioning fund; termination
of fund upon substantial completion of
decommissioning (temporary).
(a)Qualification requirements—(1)In
general. (i) A nuclear decommissioning
fund must be established and maintained
at all times in the United States pursuant
to an arrangement that qualifies as a trust
under State law. Such trust must be estab-
lished for the exclusive purpose of provid-
ing funds for the decommissioning of one
or more nuclear power plants, but a sin-
gle trust agreement may establish multiple
funds for such purpose. Thus—
(A) Two or more nuclear decommis-
sioning funds can be established and main-
tained pursuant to a single trust agreement;
and
(B) One or more funds that are to be
used for the decommissioning of a nuclear
power plant and that do not qualify as nu-
clear decommissioning funds under this
paragraph (a) can be established and main-
tained pursuant to a trust agreement that
governs one or more nuclear decommis-
sioning funds.
(ii) A separate nuclear decommission-
ing fund is required for each electing tax-
payer and for each nuclear power plant
with respect to which an electing taxpayer
possesses a qualifying interest. The In-
ternal Revenue Service (IRS) will issue a
separate schedule of ruling amounts with
respect to each nuclear decommissioning
fund and each nuclear decommissioning
fund must file a separate income tax re-
turn even if other nuclear decommission-
ing funds or nonqualified funds are es-
tablished and maintained pursuant to the
trust agreement governing such fund or
the assets of other nuclear decommission-
ing funds or nonqualified funds are pooled
with the assets of such fund.
(iii) An electing taxpayer can main-
tain only one nuclear decommissioning
fund for each nuclear power plant with
respect to which the taxpayer elects the
application of section 468A. If a nuclear
power plant is subject to the ratemak-
ing jurisdiction of two or more public
utility commissions and any such pub-
lic utility commission requires a separate
fund to be maintained for the benefit of
ratepayers whose rates are established or
approved by the public utility commis-
sion, the separate funds maintained for
such plant (whether or not established and
maintained pursuant to a single trust agree-
ment) shall be considered a single nuclear
decommissioning fund for purposes of
section 468A and §§1.468A–1T through
1.468A–4T, this section and §§1.468A–7T
through 1.468A–9T. Thus, for example,
the IRS will issue one schedule of rul-
ing amounts with respect to such nuclear
power plant, the nuclear decommissioning
fund must file a single income tax return
(see §1.468A–4T(d)(1)), and, if the IRS
2008–10 I.R.B.532March 10, 2008

disqualifies the nuclear decommissioning
fund, the assets of each separate fund are
treated as distributed on the date of dis-
qualification (see paragraph (c)(3) of this
section).
(iv) If assets of a nuclear decommis-
sioning fund are (or will be) invested
through an unincorporated organization,
within the meaning of §301.7701–2 of this
chapter, the IRS willrule, if requested,
whether the organization is an association
taxable as a corporation for Federal tax
purposes. A request for this ruling may be
made by the electing taxpayer as part of its
request for a schedule of ruling amounts
or as part of a request under §1.468A–8T
for a schedule of deduction amounts.
(2)Limitation on contributions.Ex-
cept as otherwise provided in §1.468A–8T
(relating to special transfers under section
468A(f)), a nuclear decommissioning fund
is not permitted to accept any contribu-
tions in cash or property other than cash
payments with respect to which a deduc-
tion is allowed under section 468A(a) and
§1.468A–2T(a). Thus, for example, ex-
cept in the case of a special transfer pur-
suant to §1.468A–8T, securities may not
be contributed to a nuclear decommission-
ing fund even if the taxpayer or a fund es-
tablished by the taxpayer previously held
such securities for the purpose of provid-
ing funds for the decommissioning of a nu-
clear power plant.
(3)Limitation on use of fund—(i)In
general. The assets of a nuclear decom-
missioningfundaretobeusedexclu-
sively—
(A) To satisfy, in whole or in part, the
liability of the electing taxpayer for de-
commissioning costs of the nuclear power
plant to which the nuclear decommission-
ing fund relates;
(B) To pay administrative costs and
other incidental expenses of the nuclear
decommissioning fund; and
(C) To the extent that the assets of the
nuclear decommissioning fund are not cur-
rently required for the purposes described
in paragraph (a)(3)(i)(A) or (B) of this sec-
tion, to make investments.
(ii)Definition of administrative costs
and expenses. For purposes of paragraph
(a)(3)(i) of this section, the termadminis-
trative costs and other incidental expenses
of a nuclear decommissioning fundmeans
all ordinary and necessary expenses in-
curred in connection with the operation of
the nuclear decommissioning fund. Such
term includes the tax imposed by section
468A(e)(2) and §1.468A–4T(a), any State
or local tax imposed on the income or
the assets of the fund, legal expenses, ac-
counting expenses, actuarial expenses and
trustee expenses. Such term does not in-
clude decommissioning costs or the pay-
ment of insurance premiums on a policy to
pay for the nuclear decommissioning costs
of a nuclear power plant. Such term also
does not include the excise tax imposed on
the trustee or other disqualified person un-
der section 4951 or the reimbursement of
any expenses incurred in connection with
the assertion of such tax unless such ex-
penses are considered reasonable and nec-
essary under section 4951(d)(2)(C) and it
is determined that the trustee or other dis-
qualified person is not liable for the excise
tax.
(4)Trust provisions. Each qualified
nuclear decommissioning fund trust agree-
ment must provide that assets in the fund
must be used as authorized by section
468A and the regulations and that the
agreement may not be amended so as to
violate section 468A or the regulations.
(b)Prohibitions against self-deal-
ing—(1)In general. Except as otherwise
provided in this paragraph (b), the excise
taxes imposed by section 4951 shall ap-
ply to each act of self-dealing between a
disqualified person and a nuclear decom-
missioning fund.
(2)Self-dealing defined. For purposes
of this paragraph (b), the term “self-deal-
ing” means any act described in section
4951(d), except—
(i) A payment by a nuclear decommis-
sioning fund for the purpose of satisfying,
in whole or in part, the liability of the elect-
ing taxpayer for decommissioning costs of
the nuclear power plant to which the nu-
clear decommissioning fund relates;
(ii) A withdrawal ofan excess contri-
bution by the electing taxpayer pursuant to
the rules of paragraph (c)(2) of this section;
(iii) A withdrawal by the electing tax-
payer of amounts that have been treated as
distributed under paragraph (c)(3) of this
section;
(iv) A payment of amounts remaining
in a nuclear decommissioning fund to the
electing taxpayer after the termination of
such fund (as determined under paragraph
(d)ofthissection);
(v) Any act described in section
4951(d)(2)(B) or (C);
(vi) Any act that is described in
§53.4951–1(c) of this chapter and is
undertaken to facilitate the temporary
investment of assets or the payment of
reasonable administrative expenses of the
nuclear decommissioning fund; or
(vii) A payment by a nuclear decom-
missioning fund for the performance of
trust functions and certain general banking
services by a bank or trust company that
is a disqualified person if the banking ser-
vices are reasonable and necessary to carry
out the purposes of the fund and the com-
pensation paid to the bank or trust com-
pany for such services, taking into account
the fair interest rate for the use of the funds
by the bank or trust company, is not exces-
sive.
(3)Disqualified person defined.For
purposes of this paragraph (b), the term
“disqualified person” includes each per-
son described in section 4951(e)(4) and
§53.4951–1(d).
(4)General banking services.The
general banking services allowed by para-
graph (b)(2)(vii) of this section are—
(i) Checking accounts, as long as the
bank does not charge interest on any over-
withdrawals;
(ii) Savings accounts, as long as the
fund may withdraw its funds on no more
than 30 days’ notice without subjecting it-
self to a loss of interest on its money for
the time during which the money was on
deposit; and
(iii) Safekeeping activities (see
§53.4941(d)–3(c)(2),Example 3,of this
chapter).
(c)Disqualification of nuclear decom-
missioning fund—(1)In general—(i)Dis-
qualification events. Except as otherwise
provided in paragraph (c)(2) of this sec-
tion, the IRS may, in its discretion, disqual-
ify all or any portion of a nuclear decom-
missioning fund if at any time during a tax-
able year of the fund—
(A) The fund does not satisfy the re-
quirements of paragraph (a) of this section;
or
(B) The fund and a disqualified person
engage in an act of self-dealing (as defined
in paragraph (b)(2) of this section).
(ii)Date of disqualification.(A)Ex-
cept as otherwise provided in this para-
graph (c)(1)(ii), the date on which a dis-
qualification under this paragraph (c) will
March 10, 20085332008–10 I.R.B.

take effect (date of disqualification) is the
date that the fund does not satisfy the re-
quirements of paragraph (a) of this section
or the date on which the act of self-dealing
occurs, whichever is applicable.
(B) If the IRS determines, in its discre-
tion, that the disqualification should take
effect on a date subsequent to the date
specified in paragraph (C)(1)(ii)(A) of this
section, the date of disqualification is such
subsequent date.
(iii)Notice of disqualification.TheIRS
will notify the electing taxpayer of the dis-
qualification of a nuclear decommission-
ing fund and the date of disqualification
by registered or certified mail to the last
known address of the electing taxpayer
(the notice of disqualification). For fur-
ther guidance regarding the definition of
last known address, see §301.6212–2 of
this chapter.
(2)Exception to disqualification—(i)In
general. A nuclear decommissioning fund
will not be disqualified under paragraph
(c)(1) of this section by reason of an excess
contribution or the withdrawal of such ex-
cess contribution by an electing taxpayer
if the amount of the excess contribution is
withdrawn by the electing taxpayer on or
before the date prescribed by law (includ-
ing extensions) for filing the return of the
nuclear decommissioning fund for the tax-
able year to which the excess contribution
relates. In the case of an excess contribu-
tion that is the result of a payment made
pursuant to §1.468A–3T(g)(1), a nuclear
decommissioning fund will not be disqual-
ified under paragraph (c)(1) of this section
if the amount of the excess contribution is
withdrawn by the electing taxpayer on or
before the later of—
(A) The date prescribed by law (includ-
ing extensions) for filing the return of the
nuclear decommissioning fund for the tax-
able year to which the excess contribution
relates; or
(B) The date that is 30 days after the
date that the taxpayer receives the ruling
amount for such taxable year.
(ii)Excess contribution defined.For
purposes of this section, an excess con-
tribution is the amount by which cash
payments made (or deemed made) to a
nuclear decommissioning fund during any
taxable year exceed the payment limi-
tation contained in section 468A(b) and
§1.468A–2T(b). The amount of a special
transfer permitted under §1.468A–8T is
not treated as a cash payment for this pur-
pose.
(iii)Taxation of income attributable to
an excess contribution. The income of a
nuclear decommissioning fund attribut-
able to an excess contribution is required
to be included in the gross income of
the nuclear decommissioning fund under
§1.468A–4T(b).
(3)Disqualification treated as distribu-
tion. If all or any portion of a nuclear
decommissioning fund is disqualified un-
der paragraph (c)(1) of this section, the
portion of the nuclear decommissioning
fund that is disqualified is treated as dis-
tributed to the electing taxpayer on the
date of disqualification. Such a distribu-
tion shall be treated for purposes of sec-
tion 1001 as a disposition of property held
by the nuclear decommissioning fund (see
§1.468A–4T(c)(2)). In addition, the elect-
ing taxpayer must include in gross income
for the taxable year that includes the date
of disqualification an amount equal to the
fair market value of the distributable assets
of the nuclear decommissioning fund mul-
tiplied by the fraction of the nuclear de-
commissioning fund that was disqualified
under paragraph (c)(1) of this section. For
this purpose, the fair market value of the
distributable assets of the nuclear decom-
missioning fund is equal to the fair market
value of the assets of the fund determined
as of the date of disqualification, reduced
by—
(i) The amount of any excess contribu-
tion that was not withdrawn before the date
of disqualification if no deduction was al-
lowed with respect to such excess contri-
bution;
(ii) The amount of any deemed distri-
bution that was not actually distributed be-
fore the date of disqualification (as deter-
mined under §1.468A–2T(d)(2)(iii)) if the
amount of the deemed distribution was in-
cluded in the gross income of the electing
taxpayer for the taxable year in which the
deemed distribution occurred; and
(iii) The amount of any tax that—
(A) Is imposed on the income of the
fund;
(B) Is attributable to income taken into
account before the date of disqualification
or as a result of the disqualification; and
(C) Has not been paid as of the date of
disqualification.
(4)Further effects of disqualification.
Contributions made to a disqualified fund
after the date of disqualification are not
deductible under section 468A(a) and
§1.468A–2T(a), or, if the fund is disqual-
ified only in part, are deductible only to
the extent provided in the notice of dis-
qualification. In addition, if any assets of
the fund that are deemed distributed under
paragraph (c)(3) of this section are held by
the fund after the date of disqualification
(or if additional assets are acquired with
nondeductible contributions made to the
fund after the date of disqualification), the
income earned by such assets after the date
of disqualification must be included in the
gross income of the electing taxpayer (see
section 671) to the extent that such income
is otherwise includible under chapter 1 of
the Internal Revenue Code (Code). An
electing taxpayer can establish a nuclear
decommissioning fund to replace a fund
that has been disqualified in its entirety
only if the IRS specifically consents to
the establishment of a replacement fund
in connection with the issuance of an ini-
tial schedule of ruling amounts for such
replacement fund.
(d)Termination of nuclear decommis-
sioning fund upon substantial comple-
tion of decommissioning—(1)In general.
Upon substantial completion of the de-
commissioning of a nuclear power plant
to which a nuclear decommissioning fund
relates, such nuclear decommissioning
fund shall be considered terminated and
treated as having distributed all of its as-
sets on the date the termination occurs
(the termination date). Such a distribution
shall be treated for purposes of section
1001 as a disposition of property held
by the nuclear decommissioning fund
(see §1.468A–4T(c)(2)). In addition, the
electing taxpayer shall include in gross
income for the taxable year in which the
termination occurs an amount equal to the
fair market value of the assets of the fund
determined as of the termination date, re-
duced by—
(i) The amount of any deemed distribu-
tion that was not actually distributed be-
fore the termination date if the amount of
the deemed distribution was included in
the gross income of the electing taxpayer
for the taxable year in which the deemed
distribution occurred; and
(ii) The amount of any tax that—
(A) Is imposed on the income of the
fund;
2008–10 I.R.B.534March 10, 2008

(B) Is attributable to income taken into
account before the termination date or as a
result of the termination; and
(C) Has not been paid as of the termi-
nation date.
(2)Additional rules. Contributions
made to a nuclear decommissioning
fund after the termination date are not
deductible under section 468A(a) and
§1.468A–2T(a). In addition, if any assets
are held by the fund after the termination
date, the income earned by such assets
after the termination date must be in-
cluded in the gross income of the electing
taxpayer (see section 671) to the extent
that such income is otherwise includible
under chapter 1 of the Code. Finally, an
electing taxpayer using an accrual method
of accounting is allowed a deduction for
nuclear decommissioning costs that are
incurred during any taxable year (see
§1.468A–2T(e)) even if such costs are
incurred after substantial completion of
decommissioning (for example, expenses
incurred to monitor or safeguard the plant
site).
(3)Substantial completion of decom-
missioning and termination date.(i)The
substantial completion of the decommis-
sioning of a nuclear power plant occurs
on the date that the maximum acceptable
radioactivity levels mandated by the Nu-
clear Regulatory Commission with respect
to a decommissioned nuclear power plant
are satisfied (the substantial completion
date). Except as otherwise provided in
paragraph (d)(3)(ii) of this section, the sub-
stantial completion date is also the termi-
nation date.
(ii) If a significant portion of the total
estimated decommissioning costs with re-
spect to a nuclear power plant are not in-
curred on or before the substantial com-
pletion date, an electing taxpayer may re-
quest, and the IRS will issue, a ruling that
designates a date subsequent to the sub-
stantial completion date as the termination
date. The termination date designated in
the ruling will not be later than the last day
of the third taxable year after the taxable
year that includes the substantial comple-
tion date. The request for a ruling under
this paragraph (d)(3)(ii) must be filed dur-
ing the taxable year that includes the sub-
stantial completion date and must comply
with the procedural rules in effect at the
time of the request.
§1.468A–6T Disposition of an interest in
a nuclear power plant (temporary).
(a)In general. This section describes
the Federal income tax consequences of
a transfer of the assets of a nuclear de-
commissioning fund (Fund) within the
meaning of §1.468A–1T(b)(4) in con-
nection with a sale, exchange, or other
disposition by a taxpayer (transferor) of
all or a portion of its qualifying inter-
est in a nuclear power plant to another
taxpayer (transferee). This section also
explains how a schedule of ruling amounts
will be determined for the transferor and
transferee. For purposes of this section, a
nuclear power plant includes a plant that
previously qualified as a nuclear power
plant and that has permanently ceased to
produce electricity.
(b)Requirements. This section applies
if—
(1) Immediately before the disposition,
the transferor maintained a Fund with re-
spect to the interest disposed of; and
(2) Immediately after the disposition—
(i) The transferee maintains a Fund with
respect to the interest acquired;
(ii) The interest acquired is a qualify-
ing interest of the transferee in the nuclear
power plant;
(3) In connection with the disposition,
either—
(i) The transferee acquires part or all of
the transferor’s qualifying interest in the
plant and a proportionate amount of the as-
sets of the transferor’s Fund (all such assets
if the transferee acquires the transferor’s
entire qualifying interest in the plant) is
transferred to a Fund of the transferee; or
(ii) The transferee acquires the trans-
feror’s entire qualifying interest in the
plant and the transferor’s entire Fund is
transferred to the transferee; and
(4) The transferee continues
to satisfy the requirements of
§1.468A–5T(a)(1)(iii), which permits an
electing taxpayer to maintain only one
Fund for each plant.
(c)Tax consequences. A disposition
that satisfies the requirements of paragraph
(b) of this section will have the following
tax consequences at the time it occurs:
(1)The transferor and its Fund.(i)Ex-
cept as provided in paragraph (c)(1)(ii) of
this section, neither the transferor nor the
transferor’s Fund will recognize gain or
loss or otherwise take any income or de-
duction into account by reason of the trans-
fer of a proportionate amount of the assets
of the transferor’s Fund to the transferee’s
Fund (or by reason of the transfer of the
transferor’s entire Fund to the transferee).
For purposes of the regulations under sec-
tion 468A, this transfer (or the transfer of
the transferor’s Fund) will not be consid-
ered a distribution of assets by the trans-
feror’s Fund.
(ii) Notwithstanding paragraph (c)(1)(i)
of this section, if the transferor has made
a special transfer under §1.468A–8T prior
to the transfer of the Fund or Fund as-
sets, any deduction with respect to that
special transfer allowable under section
468A(f)(2) for a taxable year ending after
the date of the transfer of the Fund or Fund
assets (theunamortized special trans-
fer deduction) is allowed under section
468A(f)(2)(C) for the taxable year that in-
cludes the date of the transfer of the Fund
or Fund assets. If the taxpayer transfers
only a portion of its interest in a nuclear
power plant, only the corresponding por-
tion of the unamortized special transfer
deduction qualifies for the acceleration
under section 468A(f)(2)(C).
(2)The transferee and its Fund. Neither
the transferee nor the transferee’s Fund
will recognize gain or loss or otherwise
take any income or deduction into account
by reason of the transfer of a proportion-
ate amount of the assets of the transferor’s
Fund to the transferee’s Fund (or by reason
of the transfer of the transferor’s Fund to
the transferee). For purposes of the regula-
tions under section 468A, this transfer (or
the transfer of the transferor’s Fund) will
not constitute a payment or a contribution
of assets by the transferee to its Fund.
(3)Basis. Transfers of assets of a Fund
to which this section applies do not af-
fect basis. Thus, the transferee’s Fund will
have a basis in the assets received from the
transferor’s Fund that is the same as the ba-
sis of those assets in the transferor’s Fund
immediately before the disposition.
(d)Determination of proportionate
amount. For purposes of this section, a
transferor of a qualifying interest in a nu-
clear power plant is considered to transfer
a proportionate amount of the assets of
its Fund to a Fund of a transferee of the
interest if, on the date of the transfer of the
interest, the percentage of the fair market
value of the Fund’s assets attributable to
the assets transferred equals the percent-
March 10, 20085352008–10 I.R.B.

age of the transferor’s qualifying interest
that is transferred.
(e)Calculation of schedule of rul-
ing amounts and schedule of deduction
amounts for dispositions described in this
section—(1)Transferor. If a transferor
disposes of all or a portion of its qualifying
interest in a nuclear power plant in a trans-
action to which this section applies, the
transferor’s schedule of ruling amounts
with respect to the interests disposed of
and retained (if any) and, if applicable,
the amount allowable as a deduction for a
special transfer under §1.468A–8T will be
determined under the following rules:
(i)Taxable year of disposition; ruling
amount. If the transferor does not file a
request for a revised schedule of ruling
amounts on or before the deemed payment
deadline for the taxable year of the trans-
feror in which the disposition of its interest
in the nuclear power plant occurs (that is,
the date that is two and one-half months af-
ter the close of that year), the transferor’s
ruling amount with respect to that plant for
that year will equal the sum of—
(A) The ruling amount contained in
the transferor’s current schedule of ruling
amounts with respect to that plant for that
taxable year multiplied by the portion of
the qualifying interest that is retained (if
any); and
(B) The ruling amount contained in
the transferor’s current schedule of ruling
amounts with respect to that plant for that
taxable year multiplied by the product
of—
(1) The portion of the transferor’s qual-
ifying interest that is disposed of; and
(2) A fraction, the numerator of which
is the number of days in that taxable year
that precede the date of disposition, and
the denominator of which is the number of
days in that taxable year.
(ii)Taxable year of disposition; deduc-
tion under §1.468A–8T. If the transferor
has elected to make a special transfer un-
der section 468A(f), the amount allowable
as a deduction under §1.468A–8T for the
taxable year in which it transfers a portion
of its interest in the nuclear plant is equal
to the deduction amount for that taxable
year from its existing schedule of deduc-
tion amounts multiplied by the percentage
of its interest that it retains. This deduction
is in addition to the deduction described in
paragraph (c)(1)(ii) of this section.
(iii)Taxable years after the year of
disposition. A transferor that retains a
qualifying interest in a nuclear power
plantmustfilearequestforarevised
schedule of ruling amounts (and, if ap-
plicable, a revised schedule of deduc-
tion amounts) with respect to that in-
terest on or before the deemed payment
deadline for the first taxable year of the
transferor beginning after the disposi-
tion. See §1.468A–3T(f)(1)(ii)(B) and
§1.468A–8T(c)(3). If the transferor does
not timely file such a request, the trans-
feror’s ruling amount and the transferor’s
deduction amount under §1.468A–8T with
respect to that interest for the affected year
or years will be zero, unless the Internal
Revenue Service (IRS) waives the appli-
cation of this paragraph (e)(1)(iii) upon a
showing of good cause for the delay.
(2)Transferee. If a transferee acquires
alloraportionofatransferor’s qualify-
ing interest in a nuclear power plant in a
transaction to which this section applies,
the transferee’s schedule of ruling amounts
with respect to the interest acquired will be
determined under the following rules:
(i)Taxable year of disposition.Ifthe
transferee does not file a request for a
schedule of ruling amounts on or before
the deemed payment deadline for the tax-
able year of the transferee in which the
disposition occurs (that is, the date that is
two and one-half months after the close of
that year), the transferee’s ruling amount
with respect to the interest acquired in the
nuclear power plant for that year is equal
to the amount contained in the transferor’s
current schedule of ruling amounts for that
plant for the taxable year of the transferor
in which the disposition occurred, multi-
plied by the product of—
(A) The portion of the transferor’s qual-
ifying interest that is transferred; and
(B) A fraction, the numerator of which
is the number of days in the taxable year of
the transferor including and following the
date of disposition, and the denominator of
which is the number of days in that taxable
year.
(ii)Taxable years after the year of dis-
position. A transferee of a qualifying in-
terest in a nuclear power plant must file
a request for a revised schedule of rul-
ing amounts with respect to that interest
on or before the deemed payment dead-
line for the first taxable year of the trans-
feree beginning after the disposition. See
§1.468A–3T(f)(1)(ii)(B). If the transferee
does not timely file such a request, the
transferee’s ruling amount with respect to
that interest for the affected year or years
will be zero, unless the IRS waives the ap-
plication of this paragraph (e)(2)(ii) upon
a showing of good cause for the delay.
(3)Examples. The following examples
illustrate the provisions of this paragraph
(e):
Example 1. (i) X Corporation is a calendar year
taxpayer engaged in the sale of electric energy gen-
erated by a nuclear power plant. The plant is owned
entirelybyX.OnMay27,2007, X transfers a 60-per-
cent qualifying interest in the plant to Y Corpora-
tion, a calendar year taxpayer. Before the transfer, X
had received a schedule of ruling amounts containing
an annual ruling amount of $10 million for the tax-
able years 2005 through 2025. For 2007, neither X
nor Y files a request for a revised schedule of ruling
amounts.
(ii) Under paragraph (e)(1)(i) of this section,
X’s ruling amount for 2007 is calculated as fol-
lows: ($10,000,000 x .40) + ($10,000,000 x .60 x
146/365)=$6,400,000. Under paragraph (e)(2)(i) of
this section, Y’s ruling amount for 2007 is calculated
as follows: $10,000,000 x .60 x 219/365=$3,600,000.
Under paragraphs (e)(1)(iii) and (e)(2)(ii) of this sec-
tion, X and Y must file requests for revised schedules
of ruling amounts by March 15, 2009.
Example 2. Y Corporation, the sole owner of a
nuclear power plant, is a calendar year taxpayer. In
year 1, Y elects to make a special transfer under sec-
tion 468A(f)(1) to the nuclear decommissioning fund
Y maintains with respect to the plant. The amount of
the special transfer is $100x, and the remaining use-
ful life of Plant is 20 years. Y obtains a schedule of
deduction amounts under §1.468A–8T(c) permitting
a $5x deduction each year over the 20-year remain-
ing useful life, and deducts $5x of the special trans-
fer amount in year 1, year 2, year 3, and year 4. On
the first day of year 5, Y transfers a 25% interest in
Plant to an unrelated party. Under paragraph (c)(1)(ii)
of this section, Y may deduct in year 5 the unamor-
tized special transfer deduction corresponding to the
portion of the plant transferred (25 percent of $80x
or $20x). In addition, under paragraph (e)(1)(ii) of
this section, Y may deduct the portion of the deduc-
tion amount for year 5 from the schedule of deduction
amounts corresponding to its retained interest in the
plant (75 percent of $5x or $3.75x). Pursuant to para-
graph (e)(1)(iii) of this section, Y must file a request
for a revised schedule of ruling amounts by March 15
of year 6.
(f)Anti-abuse provision.TheIRSmay
treat a disposition as satisfying the require-
ments of this section if the IRS determines
that this treatment is necessary or appro-
priate to carry out the purposes of section
468A and the regulations.
2008–10 I.R.B.536March 10, 2008

§1.468A–7T Manner of and time for
making election (temporary).
(a)In general. An eligible taxpayer is
allowed a deduction for the taxable year
in which the taxpayer makes a cash pay-
ment (or is deemed to make a cash pay-
ment) to a nuclear decommissioning fund
only if the taxpayer elects the application
of section 468A. A separate election is re-
quired for each nuclear decommissioning
fund and for each taxable year with respect
to which payments are to be deducted un-
der section 468A. In the case of an affili-
ated group of corporations that join in the
filing of a consolidated return for a tax-
able year, the common parent must make
a separate election on behalf of each mem-
ber whose payments to a nuclear decom-
missioning fund during such taxable year
are to be deducted under section 468A. The
election under section 468A for any tax-
able year is irrevocable and must be made
by attaching a statement (Election State-
ment) and a copy of the schedule of ruling
amounts provided pursuant to the rules of
§1.468A–3T to the taxpayer’s Federal in-
cometaxreturn(or,inthecaseofanaffil-
iated group of corporations that join in the
filing of a consolidated return, the consol-
idated return) for such taxable year. The
return to which the Election Statement and
a copy of the schedule of ruling amounts
is attached must be filed on or before the
time prescribed by law (including exten-
sions) for filing the return for the taxable
year with respect to which payments are to
be deducted under section 468A.
(b)Required information. The Election
Statement must include the following in-
formation:
(1) The legend “Election Under Section
468A” typed or legibly printed at the top of
the first page.
(2) The electing taxpayer’s name, ad-
dress and taxpayer identification number
(or, in the case of an affiliated group of cor-
porations that join in the filing of a consol-
idated return, the name, address and tax-
payer identification number of each elect-
ing taxpayer).
(3) The taxable year for which the elec-
tion is made.
(4) For each nuclear decommissioning
fund for which an election is made—
(i) The name and location of the nuclear
power plant to which the fund relates;
(ii) The name and employer identifica-
tion number of the nuclear decommission-
ing fund;
(iii) The total amount of actual cash
payments made to the nuclear decommis-
sioning fund during the taxable year that
were not treated as deemed cash payments
under §1.468A–2T(c)(1) for a prior tax-
able year;
(iv) The total amount of cash payments
deemed made to the nuclear decommis-
sioning fund under §1.468A–2T(c)(1) for
the taxable year; and
(v) The total amount of any special
transfers made under §1.468A–8T during
the taxable year.
§1.468A–8T Special transfers to qualified
funds pursuant to section 468A(f)
(temporary).
(a)General rule—(1)In general.Un-
der section 468A(f), a taxpayer maintain-
ing a qualified nucleardecommissioning
fund with respect to a nuclear power plant
may transfer cash or property into the fund
(a special transfer). The special transfer
is not subject to the ruling amount limita-
tion in section 468A(b) and is not treated
as a cash payment for purposes of that
limitation. Thus, a taxpayer may, in the
same taxable year, pay the ruling amount
and make a special transfer into the fund.
A special transfer may be made in cash,
property, or both cash and property. The
amount of a special transfer (that is, the
amount of cash and the fair market value
of property transferred) may not exceed
the present value of the pre-2005 nonqual-
ifying amount of nuclear decommission-
ing costs with respect to the nuclear power
plant. The taxpayer is entitled to a deduc-
tion against income for a special transfer,
as described in paragraph (b) of this sec-
tion. A special transfer may not be made
to a nuclear decommissioning fund before
the first taxable year in which a deduction
amount is applicable to the nuclear decom-
missioning fund (see paragraph (c) of this
section).
(2)Pre–2005 nonqualifying amount.
The present value of the pre-2005 non-
qualifying amount of nuclear decommis-
sioning costs with respect to a nuclear
power plant is the amount equal to the
pre-2005 nonqualifying percentage of
the present value of the estimated future
decommissioning costs (as defined in
§1.468A–1T(b)(6)) with respect to the nu-
clear power plant as of the first day of the
taxable year of the taxpayer in which the
special transfer is made. For this purpose,
the pre-2005 nonqualifying percentage for
the plant is 100 percent reduced by the
sum of—
(i) The qualifying percentage (within
the meaning of §1.468A–3(d)(4) as in ef-
fect on December 31, 2005) used in de-
termining the taxpayer’s last schedule of
ruling amounts for the nuclear decommis-
sioning fund under the law in effect before
the enactment of the Energy Policy Act of
2005 (that is, the percentage of the plant’s
total nuclear decommissioning costs that
were permitted to be funded through the
fund under the law in effect before the en-
actment of the Energy Policy Act of 2005);
and
(ii) The percentage of decommissioning
costs transferred in any previous special
transfer (that is, the amount transferred as
a percentage of the present value of the
estimated future costs of decommissioning
as of the first day of the taxable year in
which such previous transfer was made).
(3)Transfers in multiple years.Atax-
payer making a special transfer is not
required to transfer the entire eligible
amount in a single year. The requirements
of paragraph (c) of this section apply sep-
arately to each year in which a special
transfer is made. In calculating the amount
of any subsequent transfer, the taxpayer
must reduce the pre-2005 nonqualifying
percentage under paragraph (a)(2) of this
section to take into account all previous
transfers. For example, if a taxpayer has a
pre-2005 nonqualifying percentage of 40
percent, and transfers half of the eligible
amount in a special transfer, any subse-
quent transfer must be calculated on the
basis of a pre-2005 nonqualifying percent-
age of 20 percent.
(b)Deduction for amounts trans-
ferred—(1)In general. (i) Except as
provided in this paragraph (b), the deduc-
tion for any special transfer is allowed
ratably over the remaining useful life of
the nuclear power plant.
(ii) For purposes of this paragraph (b),
the remaining useful life of the nuclear
power plant is the period beginning on the
first day of the taxable year during which
the transfer is made and ending on the last
day of the taxable year that includes the
last day of the estimated useful life of the
March 10, 20085372008–10 I.R.B.

nuclear power plant. The last day of the
estimated useful life of the nuclear power
plant is determined for this purpose under
the rules of §1.468A–3T(c)(2).
(iii) The deduction for property con-
tributed in a special transfer is limited to
thelesserofthefairmarketvalueofthe
property contributed or the taxpayer’s ba-
sis in that property.
(2)Denial of deduction for previously
deducted amounts. If a deduction (other
than a deduction under section 468A)
has been allowed to the taxpayer (or a
predecessor) on account of expected de-
commissioning costs for a nuclear power
plant (a nonconforming deduction) or an
amount otherwise includible in income has
been excluded from the gross income of
the taxpayer (or a predecessor) on account
of such expected decommissioning costs
(a nonconforming exclusion), the deduc-
tion allowed for a special transfer to the
nuclear decommissioning fund maintained
with respect to the plant is reduced. In
the case of a single special transfer of the
full eligible amount, the reduction is equal
to the aggregate amount of all noncon-
forming deductions and nonconforming
exclusions. In the case of a transfer of less
than the full eligible amount, the reduc-
tion is a ratable portion of such aggregate
amount.
(3)Transfers of qualified nuclear de-
commissioning funds.(i) If a special trans-
fer is made to any qualified nuclear de-
commissioning fund, there is a subsequent
transfer of the fund or the assets of the fund
(a fund transfer), and §1.468–6T applies
to the fund transfer, any amount of the de-
duction under paragraph (b) of this section
allocable to taxable years ending after the
date of the fund transfer will be allowed
as a current deduction to the transferor for
the taxable year that includes the date of
the fund transfer. See §468A–6T(c) for ad-
ditional rules concerning transfers of de-
commissioning funds, including the trans-
fer of a portion of the taxpayer’s interest in
a nuclear power plant. If a taxpayer trans-
fers only part of the fund or the fund’s as-
sets, the rules in this paragraph (b)(3) ap-
ply only to the corresponding portion of
the deduction under paragraph (b) of this
section.
(ii) If a deduction is allowed to the
transferor under paragraph (b)(3)(i) of this
section and the transferee is related to the
transferor, the Internal Revenue Service
(IRS) will not approve the transferee’s
schedule of ruling amounts for taxable
years beginning after the date of the trans-
fer unless the ruling amounts are deferred
in a manner that results in recapture of the
acceleration amount. For this purpose—
(A) The acceleration amount is the dif-
ference between the deduction allowed un-
der this paragraph (b)(3) and the present
value as of the beginning of the accelera-
tion period of the deductions that, but for
the transfer, would have been allowed un-
der this paragraph (b) for taxable years dur-
ing the acceleration period;
(B) The acceleration amount is recap-
tured if the aggregate present value of the
ruling amounts at the beginning of the ac-
celeration period is equal to the amount by
which the aggregate present value of the
ruling amounts that would have been ap-
proved but for this paragraph (b)(3)(ii) ex-
ceeds the acceleration amount;
(C) The acceleration period is the pe-
riod from the first day of the transferor’s
first taxable year beginning after the date
of the transfer until the end of the plant’s
remaining useful life;
(D) Present values will be determined
using the assumptions that are used in de-
termining the transferee’s first schedule of
ruling amounts; and
(E) A transferor and a transferee are re-
lated if their relationship is specified in
section 267(b) or section 707(b)(1) or they
are treated as a single taxpayer under sec-
tion 41(f)(1)(A) or (B).
(4)Special rules—(i)Gain or loss not
recognized on transfers to fund.Nogain
or loss will be recognized on any special
transfer.
(ii)Taxpayer basis in fund. Notwith-
standing any other provision of the Inter-
nal Revenue Code (Code) and regulations,
the taxpayer’s basis in the fund is not in-
creased by reason of the special transfer.
(iii)Fund basis in transferred property.
The fund’s basis in any property trans-
ferred in a special transfer is the same as
the transferor’s basis in the property imme-
diately before the transfer.
(c)Schedule of deductions re-
quired—(1)In general. A taxpayer may
not make a special transfer to a quali-
fied nuclear decommissioning fund unless
the taxpayer requests from the IRS a
schedule of deduction amounts in con-
nection with such transfer. A schedule of
deduction amounts for a nuclear decom-
missioning fund (schedule of deduction
amounts) is a ruling (within the meaning
of §601.201(a)(2) of this chapter) spec-
ifying the annual deductions (deduction
amounts) that, over the taxable years in the
remaining useful life of the nuclear power
plant, will result in the deduction of the
entire amount of the special transfer. Such
a request may be combined with a request
for a schedule of ruling amounts under
§1.468A–3T(a). In the case of a com-
bined request, the schedule of deduction
amounts requested under this paragraph
(c)(1) must be stated separately from the
schedule of ruling amounts requested un-
der §1.468A–3T(a) and approval of the
schedule of deduction amounts under this
section will constitute a separate ruling.
A request for a schedule of deduction
amounts must comply with all provisions
of paragraph (d) of this section.
(2)Transfers in multiple taxable years.
A taxpayer making a special transfer
in more than one taxable year pursuant
to paragraph (a)(3) of this section must
request a new schedule of deduction
amounts in connection with each special
transfer.
(3)Transfer of partial interest in fund.
If a taxpayer transfers part of a fund or a
fund’s assets and is allowed a deduction
under paragraph (b)(3) of this section, the
taxpayer must request a new schedule of
deduction amounts in connection with the
transfer.
(d)Manner of requesting schedule of
deduction amounts—(1)In general.(i)In
order to receive a deduction amount for
any taxable year, a taxpayer must file a re-
quest for a schedule of deduction amounts
that complies with the requirements of this
paragraph (d), the applicable procedural
rules set forth in §601.201(e) of this chap-
ter (Statement of Procedural Rules) and
the requirements of any applicable revenue
procedure that is in effect on the date the
request is filed.
(ii) A separate request for a schedule
of deduction amounts is required for each
nuclear decommissioning fund established
by a taxpayer (see §1.468A–5T(a) for rules
relating to the number of nuclear decom-
missioning funds that a taxpayer can estab-
lish).
(iii) Except as provided by
§1.468A–5T(a)(1)(iv) (relating to certain
unincorporated organizations that may be
taxable as corporations) and §1.468A–3T
2008–10 I.R.B.538March 10, 2008

(relating to a request for a schedule of
ruling amounts), a request for a schedule
of deduction amounts must not contain
a request for a ruling on any other issue,
whether the issue involves section 468A
or another section of the Code.
(iv) In the case of an affiliated group
of corporations that join in the filing of
a consolidated return, the common parent
of the group may request a schedule of
deduction amounts for each member of the
group that possesses a qualifying interest
in the same nuclear power plant by filing a
single submission with the IRS.
(v) The IRS shall not provide or revise
a deduction amount applicable to a taxable
year in response to a request for a sched-
ule of deduction amounts that is filed after
the deemed payment deadline date (as de-
fined in §1.468A–2T(c)(1)) for such tax-
able year. In determining the date when a
request is filed, the principles of sections
7502 and 7503 shall apply.
(vi) Except as provided in paragraph
(d)(1)(vii) of this section, a request for a
schedule of deduction amounts shall be
considered filed only if such request com-
plies substantially with the requirements of
this paragraph (d).
(vii) If a request does not comply sub-
stantially with the requirements of this
paragraph (d), the IRS will notify the
taxpayer of that fact. If the information
or materials necessary to comply sub-
stantially with the requirements of this
paragraph (d) are provided to the IRS
within 30 days after this notification, the
request will be considered filed on the date
of the original submission. In addition,
the request will be considered filed on the
date of the original submission in a case
in which the information and materials
are provided more than 30 days after the
notification if the IRS determines that the
electing taxpayer made a good faith ef-
fort to provide the applicable information
or materials within 30 days after notifi-
cation and also determines that treating
the request as filed on the date of the
original submission is consistent with the
purposes of section 468A. In any other
case in which the information or materials
necessary to comply substantially with the
requirements of this paragraph (d) are not
provided within 30 days after the notifica-
tion, the request will be considered filed on
the date that all information or materials
necessary to comply with the requirements
of this paragraph (d) are provided.
(2)Information required. A request for
a schedule of deduction amounts must con-
tain the following information:
(i) The taxpayer’s name, address and
taxpayer identification number.
(ii) Whether the request is for an initial
schedule of deduction amounts or a sched-
ule of deduction amounts for a subsequent
special transfer.
(iii) The name and location of the nu-
clear power plant with respect to which
a schedule of deduction amounts is re-
quested.
(iv) A description of the taxpayer’s
qualifying interest in the nuclear power
plant and the percentage of such nuclear
power plant that the qualifying interest of
the taxpayer represents.
(v) The present value of the estimated
future decommissioning costs (as defined
in §1.468A–1T(b)(6)) with respect to the
taxpayer’s qualifying interest in the nu-
clear power plant as of the first day of the
taxable year of the taxpayer in which a
transfer is made under this section.
(vi) A description of the assumptions,
estimates and other factors that were used
by the taxpayer to determine the amount of
decommissioning costs, including each of
the following if applicable:
(A) A description of the proposed
method of decommissioning the nuclear
power plant (for example, prompt re-
moval/dismantlement, safe storage en-
tombment with delayed dismantlement,
or safe storage mothballing with delayed
dismantlement).
(B) The estimated year in which sub-
stantial decommissioning costs will first
be incurred.
(C) The estimated year in which the
decommissioning of the nuclear power
plant will be substantially complete (see
§1.468A–5T(d)(3) for a definition of sub-
stantial completion of decommissioning).
(D) The total estimated cost of decom-
missioning expressed in current dollars
(that is, based on price levels in effect at
the time of the current determination).
(E) The total estimated cost of decom-
missioning expressed in future dollars
(that is, based on anticipated price levels
when expenses are expected to be paid).
(F) For each taxable year in the period
that begins with the year specified in para-
graph (d)(2)(vi)(B) of this section (the es-
timated year in which substantial decom-
missioning costs will first be incurred) and
ends with the year specified in paragraph
(d)(2)(vi)(C) of this section (the estimated
year in which the decommissioning of the
nuclear power plant will be substantially
complete), the estimated cost of decom-
missioning expressed in future dollars.
(G) A description of the methodology
used in converting the estimated cost of de-
commissioning expressed in current dol-
lars to the estimated cost of decommission-
ing expressed in future dollars.
(H) The assumed after-tax rate of return
to be earned by the amounts collected for
decommissioning.
(I) A copy of each engineering or cost
study that was relied on or used by the
taxpayer in determining the amount of de-
commissioning costs.
(vii) The taxpayer’s pre-2005 nonqual-
ifying percentage (as defined in paragraph
(a)(2) of this section).
(viii) The estimated useful life of the
nuclear power plant (as such term is de-
fined in paragraph (b)(1)(ii) or (iii) of this
section).
(ix) If the request is for a subse-
quent schedule of deduction amounts, the
amount of the previous special transfer
and the present value of the estimated
future decommissioning costs (as defined
in §1.468A–1T(b)(6)) with respect to the
taxpayer’s qualifying interest in the nu-
clear power plant as of the first day of the
taxable year of the taxpayer in which the
previous special transfer was made.
(x) If the request is for a subsequent
schedule of deduction amounts, a copy of
all schedules of deduction amounts that re-
late to the nuclear power plant to which the
request relates and that were previously is-
sued to the taxpayer making the request.
(xi) If the request for a schedule of
deduction amounts contains a request,
pursuant to §1.468A–5T(a)(1)(iv), that the
IRS rule whether an unincorporated or-
ganization through which the assets of the
fund are invested is an association taxable
as a corporation for federal tax purposes,
a copy of the legal documents establishing
or otherwise governing the organization.
(xii) Any other information required by
the IRS that may be necessary or useful
in determining the schedule of deduction
amounts.
(3)Statement required. A taxpayer re-
questing a schedule of deduction amounts
March 10, 20085392008–10 I.R.B.

under this paragraph (d) must submit a
statement that any nonconforming deduc-
tions and nonconforming exclusions have
reduced the deduction allowed for the spe-
cial transfer in accordance with paragraph
(b)(2) of this section.
(4)Administrative procedures.TheIRS
may prescribe administrative procedures
that supplement the provisions of para-
graphs (d)(1) and (2) of this section. In ad-
dition, the IRS may, in its discretion, waive
the requirements of paragraphs (d)(1) and
(2)ofthissectionunderappropriatecir-
cumstances.
§1.468A–9T Effective/applicability date
and transitional rules (temporary).
(a)Effective date. Sections 1.468A–1T
through 1.468A–8T are effective Decem-
ber 31, 2007, and apply with respect to tax-
able years ending on or after such date.
(b)Transitional rule. For a taxable year
ending on or after January 1, 2006, and
before December 31, 2007—
(1) A taxpayer may use any reason-
able method consistent with the principles
and provisions of section 468A to deter-
mine the schedule of ruling amounts or the
schedule of deduction amounts;
(2) Application of the provisions of
§§1.468A–1T through 1.468A–8T will
be treated as a reasonable method if, ex-
cept as otherwise permitted by paragraph
(b)(4) of this section, the taxpayer applies
all provisions in §§1.468A–1T through
1.468A–8T to the taxable year;
(3) The Internal Revenue Service will
issue schedules of ruling amounts based on
the regulations in effect prior to January 1,
2006, if a taxpayer so requests and if the In-
ternal Revenue Service finds the request to
be consistent with the principles and pur-
poses of section 468A; and
(4) The taxpayer’s request for a sched-
ule of ruling amounts or a schedule of de-
duction amounts applicable to the taxable
year will be treated as timely if the request
is filed before January 1, 2008.
Par. 4. The authority citation for part
602 continues to read as follows:
Authority: 26 U.S.C. 7805.
Par. 5. In §602.101, paragraph (b) is
amended by adding the following entries
in numerical order to the table to read as
follows:
§602.101 OMB Control numbers.
*****
(b) * * *
CFR part or section where
identified and described
Current OMB
Control No.
*****
1.468A–3T...........................................................
1545–1269
1545–13
78
1545–1511
*****
1.468A–4T...........................................................
1545–0
954
*****
1.468A–7T...........................................................
1545–0954
1545–1511
*****
1.468A–3T(h),
1.468A–7T, and
1.468A–8T(d)
...........................................................
1545–2091
*****
Kevin M. Brown,
Deputy Commissioner for
Services and Enforcement.
Approved November 27, 2007.
Eric Solomon,
Assistant Secretary of the
Treasury (Tax Policy).
(Filed by the Office of the Federal Register on December 28,
2007, 8:45 a.m., and published in the issue of the Federal
Register for December 31, 2007, 72 F.R. 74175)
Section 469.—Passive
Activity Losses and
Credits Limited
Is a noncorporate limited partner’s distributive
share of partnership interest expense incurred in the
trade or business of trading securities by the part-
nership subject to the limitation on the deduction of
investment in section 163(d) of the Internal Revenue
Code? See Rev. Rul. 2008-12, page 520.
Section 482.—Allocation
of Income and Deductions
Among Taxpayers
Federal short-term, mid-term, and long-term rates
are set forth for the month of March 2008. See Rev.
Rul. 2008-11, page 541.
Section 483.—Interest on
Certain Deferred Payments
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of March 2008. See Rev. Rul. 2008-11, page 541.
Section 642.—Special
Rules for Credits and
Deductions
Federal short-term, mid-term, and long-term rates
are set forth for the month of March 2008. See Rev.
Rul. 2008-11, page 541.
2008–10 I.R.B.540March 10, 2008

Section 702.—Income and
Credits of Partner
Is a noncorporate limited partner’s distributive
share of partnership interest expense incurred in the
trade or business of trading securities by the part-
nership subject to the limitation on the deduction of
investment interest in section 163(d) of the Internal
Revenue Code? See Rev. Rul. 2008-12, page 520.
Section 703.—Partnership
Computations
Is a noncorporate limited partner’s distributive
share of partnership interest expense incurred in the
trade or business of trading securities by the part-
nership subject to the limitation on the deduction of
investment interest in section 163(d) of the Internal
Revenue Code? See Rev. Rul. 2008-12, page 520.
Section 807.—Rules for
Certain Reserves
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of March 2008. See Rev. Rul. 2008-11, page 541.
Section 846.—Discounted
Unpaid Losses Defined
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of March 2008. See Rev. Rul. 2008-11, page 541.
Section 1274.—Determi-
nation of Issue Price in the
Case of Certain Debt Instru-
ments Issued for Property
(Also Sections 42, 280G, 382, 412, 467, 468, 482,
483, 642, 807, 846, 1288, 7520, 7872.)
Federal rates; adjusted federal rates;
adjusted federal long-term rate and the
long-term exempt rate.For purposes of
sections 382, 642, 1274, 1288, and other
sections of the Code, tables set forth the
rates for March 2008.
Rev. Rul. 2008–11
This revenue ruling provides various
prescribed rates for federal income tax
purposes for March 2008 (the current
month). Table 1 contains the short-term,
mid-term, and long-term applicable fed-
eral rates (AFR) for the current month
for purposes of section 1274(d) of the
Internal Revenue Code. Table 2 contains
the short-term, mid-term, and long-term
adjusted applicable federal rates (adjusted
AFR) for the current month for purposes
of section 1288(b). Table 3 sets forth the
adjusted federal long-term rate and the
long-term tax-exempt rate described in
section 382(f). Table 4 contains the ap-
propriate percentages for determining the
low-income housing credit described in
section 42(b)(2) for buildings placed in
service during the current month. Finally,
Table 5 contains the federal rate for deter-
mining the present value of an annuity, an
interest for life or for a term of years, or
a remainder or a reversionary interest for
purposes of section 7520.
REV. RUL. 2008–11 TABLE 1
Applicable Federal Rates (AFR) for March 2008
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
AFR
2.25%
2.24%2.23%2.23%
110% AFR2.48%2.46%
2.45%2.45%
120% AFR2.71%2.69%2.68%2.68%
130% AFR2.93%2.91%2.90%2.89%
Mid-term
AFR2.97%
2.95%
2.94%2.93%
110% AFR3.28%
3.25%
3.24%3.23%
120% AFR
3.57%3.54%3.52%3.51%
130% AFR3.88%3.84%3.82%3.81%
150% AFR
4.48%4.43%4.41%4.39%
175% AFR5.23%5.16%5.13%5.11%
Long-term
AFR4.27%4.23%4.21%4.19%
110% AFR4.70%
4.65%
4.62%4.61%
120% AFR
5.14%5.08%5.05%5.03%
130% AFR
5.58%5.50%5.46%5.44%
March 10, 20085412008–10 I.R.B.

REV. RUL. 2008–11 TABLE 2
Adjusted AFR for March 2008
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term adj
usted
AFR
2.12%2.11%2.10%2.10%
Mid-term adjusted AFR2.93%2.91%2.90%2.89%
Long-term adjusted
AFR
4.11%4.07%
4.05%
4.04%
REV. RUL. 2008
–11 TABLE 3
Rates Under Section 382 for March 2008
Adjusted federal long-term rate for the current month4.11%
Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted
federal long-term rates for the current month and the prior two months.)4.25%
REV. RUL. 2008–11 TABLE 4
Appropriate Percentages Under Section 42(b)(2) for March 2008
Appropriate percentage for the 70% present value low-income housing credit7.84%
Appropriate percentage for the 30% present value low-income housing credit3.36%
REV. RUL. 2008–11 TABLE 5
Rate Under Section 7520 for March 2008
Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years,
or a remainder or reversionary interest3.6%
Section 1288.—Treatment
of Original Issue Discount
on Tax-Exempt Obligations
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of March 2008. See Rev. Rul. 2008-11, page 541.
Section 7520.—Valuation
Tables
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of March 2008. See Rev. Rul. 2008-11, page 541.
Section 7872.—Treatment
of Loans With Below-Market
Interest Rates
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month
of March 2008. See Rev. Rul. 2008-11, page 541.
2008–10 I.R.B.542March 10, 2008

Part III. Administrative, Procedural, and Miscellaneous
Reissuance Standards for
State and Local Bonds
Notice 2008–27
SECTION 1. Purpose.
The Internal Revenue Service (“IRS”)
and the Treasury Department expect to is-
sue regulations under § 150 of the Internal
Revenue Code of 1986 to modify and clar-
ify the determination of when tax-exempt
bonds are treated as reissued or retired
solely for purposes of § 103 and §§ 141
through 150. This notice provides interim
guidance until the promulgation of such
regulations. This notice modifies certain
special reissuance standards for “qualified
tender bonds” under IRS Notice 88–130,
1988–2 C.B. 543. This notice also mod-
ifies certain aspects of the application of
§ 1.1001–3 of the Income Tax Regula-
tions on debt modifications as they apply
to tax-exempt bonds solely for purposes of
§ 103 and §§ 141 through 150. This no-
tice provides three special rules which ad-
dress certain temporary waivers of inter-
est rate caps, certain nonrecourse debt, and
certain modifications of qualified hedges.
In part, this notice is intended to provide
greater certainty and flexibility to address
certain potential Federal tax issues that
have arisen in the tax-exempt bond market
as a result of recent rating agency down-
grades of major municipal bond insurers
and failures of auctions in the auction rate
bond sector of the tax-exempt bond mar-
ket.
This notice applies solely for purposes
of § 103 and §§ 141 through 150 of the
Code. No inference should be drawn
regarding whether a debt modification
described in this notice would constitute
an exchange for purposes of § 1001 of the
Code. In addition, no inference should
be drawn about whether similar conse-
quences would obtain if a transaction falls
outside the scope of this notice.
This notice invites public comment on
the guidance provided herein.
SECTION 2. Background
Reissuance
Reissuance of a tax-exempt bond for
purposes of the tax-exempt bond provi-
sions triggers retesting of all the various
program requirements for new issues of
tax-exempt bonds. A reissuance of an
issue of tax-exempt bonds may result in
various negative consequences to a bond
issuer, including, among other things,
changes in yield for purposes of the arbi-
trage investment restrictions, acceleration
of arbitrage rebate payment obligations,
deemed terminations of integrated interest
rate swaps under the qualified hedge rules
for arbitrage purposes, new public ap-
proval requirements for qualified private
activity bonds, and change in law risk.
In general, the standard for determin-
ing whether tax-exempt bonds are reis-
sued, retired, or otherwise modified sig-
nificantly enough to trigger a retesting of
the program requirements for new issues
of tax-exempt bonds under the tax-exempt
bond provisions of the Code is based on
the general Federal tax standards for debt
exchanges under § 1001 and regulations
thereunder.
In general, § 1.1001–3 of the In-
come Tax Regulations employs a signif-
icant modification standard to determine
whether modifications to a debt instrument
in any form are sufficiently significant to
cause the debt instrument to be treated
as reissued or exchanged for purposes of
§ 1001. Section 1.1001–3 applies to mod-
ifications in the form of amendments to
the terms of an existing debt instrument
and to modifications in the form of an
actual exchange of an existing debt instru-
ment for a different debt instrument. The
determination of whether the resulting
debt instrument is treated as a reissued
new debt instrument or a continuation of
the original debt instrument depends on
whether the result represents a “significant
modification” of the original debt instru-
ment, as defined in § 1.1001–3.
Notice 88–130 provides certain special
reissuance rules for certain eligible tax-
exempt bonds that are “qualified tender
bonds,” as defined therein. Notice 88–130
provides that qualified tender bonds will
not be treated as reissued for purposes of
§ 103 and §§ 141 through 150 as a result
of certain tender rights and certain changes
in interest rate modes and other terms of
bonds that are covered specifically by the
detailed rules and limitations set forth in
Notice 88–130.
Interest Rate Modes—Tender Option
Modes and Auction Rate Modes
Issuers may issue fixed rate tax-exempt
bonds that bear interest at fixed rates to
maturity or variable rate bonds that bear in-
terest at variable rates which float period-
ically in accordance with various market-
based interest-rate setting mechanisms. Is-
suers often include multi-modal interest
rate features in the preauthorized terms of
the bond documents which provide issuers
with the flexibility to change interest rate
modes under parameters set forth in the
bond documents.
One common interest rate mode em-
ployed with tax-exempt bonds is a ten-
der option mode. “Tender option bonds”
are also referred to commonly as “variable
rate demand bonds.” Tender option bonds
have short-term interest features tied to
current market rates necessary to remar-
ket the bonds at par. Tender option bonds
have ongoing tender options or put op-
tions associated with the interest rate-set-
ting mechanism whichallow bondholders
to tender their bonds for purchase at par at
specified intervals, typically every seven
days. Tender option bonds generally have
creditworthy third-party liquidity facilities
from banks or other liquidity providers to
support the tender options and may have
credit enhancement from bond insurers or
other providers. Tender option bonds also
may have interest mode conversion op-
tions which grant to the issuer or a con-
duit borrower an option to change the in-
terest rate mode on the bonds from a ten-
der option mode to another short-term in-
terest rate mode or to a fixed interest rate
to maturity. At the time of a conversion
to another interest rate mode, tender option
bonds typically are subject to a mandatory
tender for purchase but a bondholder may
be allowed to elect to retain the bonds.
Upon the exercise of ongoing tender op-
tions associated with the short-term inter-
est rate-setting mechanism for tender op-
tion bonds and upon any mandatory or op-
tional tender upon conversion of the inter-
est rate on the bonds to another interest rate
mode, a remarketing agent or a liquidity
provider typically will acquire the bonds
March 10, 20085432008–10 I.R.B.

subject to the tender at par and resell the
bonds either to the same bondholders or to
others willing to purchase such bonds. In
general, Notice 88–130 provides guidance
for when the tenders associated with ten-
der option bonds will not constitute reis-
suances if they meet the specific detailed
eligibility requirements for “qualified ten-
der bonds,” as defined in Notice 88–130.
Another interest rate mode used with
tax-exempt bonds is an auction rate mode.
The interest rate on auction rate bonds is
reset at predetermined intervals (generally
under one year) using a modified Dutch
auction process. Auction rate bonds gen-
erally trade at par and are callable at par on
any interest payment date at the option of
the issuer. Unlike bonds in a tender option
mode, however, bonds in an auction rate
mode have no ongoing tender options or
put options to support the interest rate-set-
ting process. Thus, auction rate bonds
are viewed as long-term investments with
a short-term interest rate-setting process.
Auction rate bonds generally have maxi-
mum rates based on state law restrictions
or certain formulas, such as a multiple of a
tax-exempt or taxable index. Auction rate
bonds may have credit enhancement from
bond insurers or other providers. Auction
rate bonds also may have interest mode
conversion options similar to tender op-
tion bonds which grant to the issuer or a
conduit borrower an option to change the
interest rate mode on the bonds from an
auction rate mode to another short-term in-
terest rate mode or to a fixed interest rate
to maturity. At the time of a conversion
to another interest rate mode, auction rate
bonds typically are subject to a manda-
tory tender for purchase in a process sim-
ilar to mandatory tenders on conversions
of interest rate modes used with tender op-
tion bonds. Questions have arisen regard-
ing whether or to what extent auction rate
bonds can be treatedas qualified tender
bonds for purposes of the provisions of
Notice 88–130.
Approach of Guidance
This notice modifies and expands the
protection afforded by Notice 88–130 to
provide that authorized changes in addi-
tional interest rate modes and certain op-
tional or mandatory tenders of the bonds
will not result in a reissuance of the tax-ex-
empt bonds solely for purposes of § 103
and §§ 141 through 150. This notice pro-
vides that other types of changes to tax-ex-
empt bonds are tested for reissuance pur-
poses under the significant modification
standard under § 1.1001–3. In addition,
this notice also provides special rules for
certain issues that have arisen as a result of
recent ratings downgrades of the bond in-
surers and auction failures on auction rate
bonds.
SECTION 3. Scope and Application
3.1.Scope and General Rules.The
IRS and the Treasury Department expect
to promulgate regulations under § 150 to
provide guidance on whether tax-exempt
bonds are treated as reissued or retired
solely for purposes of § 103 and §§ 141
through 150. Specifically, for purposes
of § 103 and §§ 141 through 150 only,
in the case of a qualified tender bond (as
defined herein), any qualified interest rate
mode change (as defined herein) and any
qualified tender (as defined herein) will
not be treated as a modification under
§ 1.1001–3. Therefore, for these pur-
poses, a qualified tender bond will not
be treated as reissued or retired solely as
a result of a qualified interest rate mode
change or the existence or exercise of
any qualified tender. Further, in applying
§ 1.1001–3 to modifications of tax-exempt
bonds, any interest rate variance directly
related to a qualified interest rate mode
change will not be treated as a modifi-
cation under § 1.1001–3, and thus such
interest rate variances need not be tested
under the change in yield rule for deter-
mining significant modifications under
§ 1.1001–3(e)(2). Except as otherwise
specially provided in this notice, the de-
termination of whether any modification
to an issue of tax-exempt bonds causes a
reissuance or retirement of the tax-exempt
bonds for purposes of § 103 and §§ 141
through 150 is based on whether the mod-
ifications are significant modifications
under § 1.1001–3.
Similar to the treatment under Notice
88–130, and except as expressly provided
herein with respect to the treatment of
“qualified interest rate mode changes” and
“qualified tenders” on “qualified tender
bonds” (all as redefined herein), a tax-ex-
empt bond generally is treated as reissued
or retired on the first date on which: (1) a
significant modification to the terms of the
bond occurs under § 1.1001–3 or a dispo-
sition of the bond otherwise occurs under
section 1001; (2) the bond is purchased or
otherwise acquired by or on behalf of the
issuer or a true obligor which is a govern-
mental unit or an agency or instrumentality
thereof; or (3) the bond is otherwise retired
or redeemed. For these purposes, except
as otherwise expressly provided herein, a
bond is treated as purchased or otherwise
acquired by or on behalf of a person if the
bond is purchased or otherwise acquired
(other than pursuant to the terms of a third
party guarantee, liquidity facility, or re-
marketingarrangement)bythatpersonin
a manner that liquidates the bondholder’s
investment.
3.2.Definitions. The following defini-
tions apply for purposes of this notice only:
(1).Qualified Tender Bond.Theterm
“qualified tender bond” means a tax-ex-
empt bond that is part of an issue which
has all of the following features: (a) for
each interest rate mode that is preautho-
rized under the terms of the bond con-
sidered separately,the bond bears inter-
est during the allowable term of that in-
terest rate mode at either a fixed interest
rate or a variable interest rate that consti-
tutes a qualified floating rate on a vari-
able rate debt instrument for a tax-exempt
bond under § 1.1275–5(b) (e.g., various in-
terest rate indexes and rate-setting mech-
anisms that reasonably can be expected
to measure contemporaneous variations in
the cost of newly-borrowed funds, includ-
ing, without limitation, interest rates de-
termined by reference to eligible interest
rate indexes (e.g.,the SIFMA index), ten-
der option-based interest rate measures, or
a Dutch auction process); (b) interest on
the bond is unconditionally payable at pe-
riodic intervals at least annually; and (c)
the final maturity date of the bond is no
longer than the lesser of 40 years after the
issue date of the bond or the latest date
that is reasonably expected as of the is-
sue date of the bond to be necessary to
carry out the governmental purpose of the
bond (with the 120 percent weighted av-
erage economic life of financed facilities
test under Section 147(b) being treated as
a safe harbor for this purpose).
(2).Qualified Interest Rate Mode
Change. In general, a “qualified inter-
est rate mode change” is a change in the
interest rate mode on a bond that is au-
thorized under the terms of the bond upon
2008–10 I.R.B.544March 10, 2008

its original issuance. Further, in order to
be a qualified interest rate mode change,
the terms of the bond must require that the
bond be resold at a price equal to par upon
conversion to a new interest rate mode,
except that, upon a conversion to an inter-
est rate mode that is a fixed interest rate
for the remaining term of the bond to ma-
turity, the bond may be resold at a market
premium or a market discount from the
stated principal amount of that bond.
(3).Qualified Tender. A “qualified ten-
der” is either a tender option or a manda-
tory tender requirement that is authorized
under the terms of the bond upon its orig-
inal issuance and that meets the require-
ments of this Section 3.2(3). A bond is
subject to a tender option or a tender re-
quirement if the bondholder either has the
option at specified times (e.g.,an ongoing
tender option as part of the interest rate-
setting process for tender option bonds) or
the mandatory requirement upon specified
occurrences (e.g.,a mandatory tender upon
conversion from one interest rate mode to
a different interest rate mode) to tender the
bond for purchase or redemption at a price
equal to par (which may include any ac-
crued interest) pursuant to the terms of the
bond on one or more tender dates before
the final stated maturity date. A purchase
of a bond pursuant to a tender option or
mandatory tender requirement is treated as
part of a qualified tender if the purchase
occurs under the terms of the bond (re-
gardless of whether the purchase is by the
issuer, a liquidity provider, a remarketing
agent, a bond trustee,a conduit borrower,
or an agent of any of them), the terms of
the bond require that at least best efforts be
used to remarket the bond, and the bond is
remarketed no later than 90 days after the
date of such purchase.
3.3.Special Rule for Nonrecourse
Debt. Solely for purposes of § 103
and §§ 141 through 150, in applying
§ 1.1001–3(e)(4)(iv)(B) to determine
whether a modification of the security
or credit enhancement on a tax-exempt
bond that is a nonrecourse debt instru-
ment is a significant modification, such
a modification is treated as a significant
modification only if the modification re-
sults in a change in payment expectations
under § 1.1001–3(e)(4)(vi).
3.4.Special Temporary Relief for Cer-
tain Waivers of Interest Rate Caps on Auc-
tion Rate Bonds. Solely for purposes of
§103and§§141through150,inapply-
ing § 1.1001–3(e)(2) to determine whether
amodificationtotheyieldontax-exempt
bonds that bear interest based on an auc-
tion rate constitutes a significant modifi-
cation, a temporary waiver, in whole or in
part, of the terms of a cap on the maximum
interest rate on such auction rate bonds is
disregarded to the extent that any agree-
ment to waive such a cap and the period
during which such a waiver is in effect both
are within the period between November 1,
2007 and July 1, 2008. Except for the spe-
cial relief provided in this section, a waiver
of a cap on an interest rate on a tax-exempt
bond generally is required to be tested for
whether it causes a significant modifica-
tion under § 1.1001–3.
3.5Certain Modifications of Qualified
Hedges for Arbitrage Purposes.Solely
for purposes of the arbitrage investment
restrictions under § 148, in determining
whether a modification of a qualified
hedge results in a termination of the hedge
under § 1.148–4(h), such a modification is
not treated as a termination of the hedge
if both: (1) the modification is not rea-
sonably expected as of the date of the
modification to change the yield on the
affected hedged bonds over the remaining
term of the hedged bonds by more than
one quarter of one percent (.25 percent or
twenty-five basis points)per annum;and
(2) the payments and receipts on the qual-
ified hedge, as modified, are fully taken
into account as adjustments to the yield on
those hedged bonds for arbitrage purposes
under § 148.
3.6Examples. The following examples
illustrate the application of certain princi-
ples in this notice and § 1.1001–3 as they
apply to tax-exempt bonds for purposes of
this notice.
Example 1.Insignificant Change in Credit En-
hancement and Impact on Floating Interest Rate.On
July 1, 2007, a municipality (the “Issuer”) issued
$1 million in tax-exempt bonds that bear interest at
an auction interest rate and that mature in 40 years
(the “Bonds”). The Bonds are recourse obligations
that are secured by the issuer’s underlying primary
A-rated investment grade credit. The Bonds are
secured further by credit enhancement under a bond
insurance policy provided by a AAA-rated bond in-
surer. Pursuant to the terms of the Bonds, the auction
interest rate on the Bonds resets every 7 days. The
terms of the Bonds grant the issuer the option to
convert the interest rate mode on the Bonds from an
auction rate mode to either a 7-day tender option rate
mode or to a long-term fixed interest rate to maturity,
subject to a mandatory tender of the Bonds upon
such a conversion. The Bonds are qualified tender
bonds under § 3.2 of the notice.
On January 3, 2008, the auction interest rate
on the Bonds is set at 10% as a consequence of a
downgrade in the bond insurer’s credit rating from
a AAA rating to a AA rating and associated market
disruption. On January 10, 2008, the issuer amended
the terms of the Bonds to replace the now AA-rated
bond insurance with a AAA-rated bank letter of
credit as credit enhancement, but otherwise made no
other changes to the terms of the Bonds. On January
10, 2008, the auction rate on the Bonds floated down
to 3% primarily as a result of the change in credit
enhancement on the Bonds.
The amendment to the terms of the Bonds to
change the credit enhancement is a modification to
a recourse debt instrument that must be tested for
significance under the change in security or credit
enhancement rule in § 1.1001–3(e)(4)(iv). Because
the change in security or credit enhancement did not
cause a change in payment expectations on the Bonds
(i.e.,the Bonds had an investment grade payment
expectation before and after the change in credit
enhancement), this change in credit enhancement is
not a significant modification of the Bonds under
§ 1.1001–3 and thus does not cause a reissuance
of the Bonds under § 103 and §§ 141 through 150.
Further, the fact that the market impact of the change
in credit enhancement caused the floating interest
rate on the Bonds to float down from 10% to 3%
is not required to be tested under the 25-basis point
change in yield rule for significant modifications
under § 1.1001–3(e)(2) because the Issuer has made
no change to the interest rate-setting mechanism
under the terms of the Bonds.
Example 2.Exchange of Bonds to Remove Bond
Insurance. Assume the same facts as inExample 1
above, except that, instead of amending the terms
of the existing Bonds (the “Old Bonds”) to change
the credit enhancement, on January 10, 2008, the Is-
suer issued new bonds with new Cusip numbers (the
“New Bonds”) and did an actual exchange of the
New Bonds for the Old Bonds. The New Bonds are
not backed by any bond insurance or other credit en-
hancement. The New Bonds without the bond insur-
ance have an A credit rating. There are no other dif-
ferences between the New Bonds and the Old Bonds.
The result would be the same as inExample 1and
no reissuance of the Bonds would occur. Section
1.1001–3 applies the same significant modification
standard to amendments to the terms of an existing
debt instrument and to actual exchanges of an existing
debt instruments for a different debt instrument. Fur-
ther, the same modification analysis under § 1.1001–3
would apply to an acquisition of an existing debt in-
strument for cash by an intermediary purchaser who
is not an agent of or otherwise related to the issuer
from an existing bondholder, an exchange of that ac-
quired debt instrument for a modified debt instrument
between such intermediary purchaser and the issuer
and a subsequent sale by that intermediary purchaser
to a different bondholder.
Example 3.Impact of Authorized Changes in In-
terest Rate Modes and Associated Mandatory Ten-
ders. Assume the same facts as inExample 1above,
except that, on January 10, 2008, the Issuer also exer-
cised its option under the terms of the Bonds to con-
vert the interest rate mode on the Bonds from an auc-
tion rate mode to a fixed interest rate of 5% for the
March 10, 20085452008–10 I.R.B.

remaining term of the Bonds. The terms of the Bonds
also required a mandatory tender and remarketing of
the Bonds in connection with this interest rate mode
change. The mandatory tender is a qualified tender
and the change in the interest rate mode is a qualified
interest rate mode change. Thus, the Bonds are quali-
fied tender bonds, as defined in § 3.2 of the notice, the
conversion of the interest rate on the Bonds from an
auction rate mode to a fixed interest rate is pursuant
to a qualified interest rate mode change” and the as-
sociated tender is qualified tender, all as defined in
§ 3.2 of the notice. Thus, under § 3.1 of the notice, in
determining whether the Bonds are reissued for pur-
poses of the tax-exempt bond provisions of the Code,
the qualified interest rate mode change and the qual-
ified tenders are not treated as modifications under
§ 1.1001–3. Furthermore, the interest rate change on
the Bonds from a floating auction rate of 10% to a
fixed interest rate of 5% was directly related to the
qualified interest rate mode change and, under § 3.1
of the notice, also is not treated as a modification un-
der § 1.1001–3. Finally, as inExample 1,noreis-
suance of the Bonds occurred for purposes of § 103
and§§141to150asaresultofthechangeincredit
enhancement.
Example 4.Impact of Unauthorized Changes.
Assume the same facts as inExample 1, except that
the terms of the Bonds do not provide for any conver-
sions of the interest rate modes. On January 7, 2008,
Issuer amends the Bond documents to allow the Is-
suer to convert the interest rate mode on the Bonds
from an auction rate mode to either a 7-day tender op-
tion rate mode or to a long-term fixed interest rate to
maturity, subject to a mandatory tender of the Bonds
upon such a conversion. On January 10, 2008, Issuer
exercised its option under the amended terms of the
Bonds to convert the interest rate mode on the Bonds
from an auction rate mode to a fixed interest rate of
5% for the remaining term of the Bonds. The Issuer
also required a mandatory tender and remarketing of
the Bonds in connection with this interest rate mode
change.
Because the change in interest rate mode is not
pursuant to the terms of the Bonds when originally
issued, it is not a qualified interest rate mode change
within the meaning of this notice. Similarly, the ten-
der of the Bonds on January 10, 2008 was not pur-
suant to the terms of the Bond as originally issued
and therefore was not a qualified tender within the
meaning of this notice. Accordingly, the provisions
of this notice are not applicable either to the interest
rate mode change on the Bonds or to the tender of the
Bonds. Thus, to determine whether these modifica-
tions cause a reissuance or retirement of the Bonds for
purposes of § 103 and §§ 141 through 150, the im-
pact of these modifications must be analyzed under
§ 1.1001–3 to determine whether a significant modi-
fication of the terms of the Bonds occurred.
SECTION 4. Interim Guidance and
Reliance
This notice provides interim guidance.
Issuers of tax-exempt bonds may rely
on this notice for any actions taken with
respect to tax-exempt bonds on or after
November 1, 2007 and before the effective
date of future regulations under § 150 that
implement the guidance in this notice. Is-
suers also may continue to rely on Notice
88–130 until the effective date of such fu-
ture regulations. The IRS and the Treasury
Department may amend or supplement the
guidance in this notice as circumstances
warrant.
SECTION 5. Request for Comments
Before any notice of proposed rulemak-
ing is issued with respect to the guidance
provided in this notice, consideration will
be given to any written public comments
on this notice that are submitted timely by
May 19, 2008, and a signed original and
eight (8) copies) of such comments should
be sent to the IRS. Send submissions to:
CC:PA:LPD:PR (NOT–2008–27), room
5203, IRS, P.O. Box 7604, Ben Franklin
Station, Washington, DC 20044. Sub-
missions may be sent electronically, via
the IRS Internet site atwww.irs.gov/regs
or via the Federal eRulemaking Portal at
www.regulations.gov(indicate IRS and
REG–118788–06). All comments will be
available for public inspection and copy-
ing.
SECTION 6. Drafting Information
The principal author of this notice
is Aviva M. Roth, Office of the Chief
Counsel (Financial Institutions and Prod-
ucts). However, other personnel from the
IRS and the Treasury Department par-
ticipated in its development. For further
information regarding this notice, contact
Aviva M. Roth at (202) 622–3980 (not a
toll-free call).
2008 Economic Stimulus
Payments: Filing Instructions
for Certain Individuals Not
Otherwise Required to File an
Income Tax Return
Notice 2008–28
PURPOSE
This notice informs certain individuals
not otherwise required to file an income
tax return how to request the economic
stimulus payment authorized by the Eco-
nomic Stimulus Act of 2008.
BACKGROUND
The Economic Stimulus Act of 2008,
Pub. L. No. 110–185, 122 Stat. 613 (Feb.
13, 2008) (Act) amended § 6428 of the
Internal Revenue Code (Code) to provide
economic stimulus payments to eligible in-
dividuals. For this purpose, an eligible in-
dividual is any individual other than a non-
resident alien, an estate or trust, or an in-
dividual who can be claimed as a depen-
dent under § 151 of the Code for the tax-
able year. Section 6428(g) authorizes ad-
vance refunds and credits of the economic
stimulus payments to be made in 2008.
In general, the amount of the 2008 eco-
nomic stimulus payment is the lesser of:
(1) the individual’s net income tax liability
for 2007, or (2) $600 ($1,200 in the case
of a joint return). However, as provided
in § 6428(b), an individual (or married
couple filing jointly) with at least $3,000
of “qualifying income” in 2007 may re-
ceive a minimum payment of $300 ($600
in the case of a joint return), even though
the individual (or married couple) has no
net income tax liability for 2007. Qual-
ifying income for purposes of § 6428(b)
means: (1) earned income as defined in
§ 32(c)(2) of the Code that is includible in
gross income for federal income tax pur-
poses (including, ifelected, certain com-
bat zone compensation of members of the
Armed Forces of the United States); (2)
social security benefits (including monthly
retirement, survivor and disability bene-
fits, but not including supplemental secu-
rity income (SSI) payments) and Tier 1
railroad retirement benefits described in
§ 86(d) of the Code; and (3) disability com-
pensation, disability pension and survivor
benefits from the Department of Veterans
Affairs pursuant to Chapters 11, 13, or 15
of Title 38 of the United States Code.
In order to receive an economic stim-
ulus payment in 2008, an eligible indi-
vidual must file an income tax return for
2007. Most eligible individuals are re-
quired by § 6012(a) of the Code to file an
income tax return because their gross in-
come for 2007 exceeds the sum of their ex-
emption amount plus the applicable stan-
dard deduction, or are required by § 6017
of the Code to file an income tax return
with respect to self-employment tax on net
earnings from self-employment of $400 or
more. Additionally, some eligible individ-
uals who are not required by § 6012(a) or
2008–10 I.R.B.546March 10, 2008

§6017tofileanincometaxreturnnev-
ertheless file to obtain refunds of withheld
tax (e.g., tax withheld on wages under § 31
of the Code).
Eligibility for the 2008 economic stim-
ulus payment, and the amount of that pay-
ment, is based on information reported on
the taxpayer’s filed income tax return for
2007.See§ 6428(g). Thus, individuals
who are required by § 6012(a) or § 6017
to file an income tax return, or who file
to obtain a refund of withheld tax, will not
need to file any extra forms or call the Ser-
vice to request the payment in 2008. How-
ever, eligible individuals with qualifying
income not already reported on their filed
2007 income tax return (e.g., certain dis-
ability or survivor benefits from the De-
partment of Veterans Affairs) may need to
file an amended return in some situations
to receive a larger stimulus payment.
Many individuals with low earned in-
come or other qualifying income (e.g.,so-
cial security benefits, Tier 1 railroad re-
tirement benefits, and certain disability or
survivor benefits from the Department of
Veterans Affairs) may not be required by
§ 6012(a) to file an income tax return and
maynotfileanincometaxreturntore-
ceive a refund of withheld taxes. This no-
tice informs these individuals of the min-
imum filing necessary to obtain the eco-
nomic stimulus payment in 2008.
DISCUSSION
Section 6428(g)(1) of the Code treats
an eligible individual as having made a
payment in 2007 against the income tax
in an amount equal to the amount of the
economic stimulus payment. Thus, the
amount of the 2008 economic stimulus
payment is treated as an overpayment
of tax for 2007 which, as provided in
§ 6428(g)(3), the Service is directed to
refund or credit to the eligible individual.
Section 6402 of the Code and
§ 301.6402–3 of the Regulations on Proce-
dure and Administration authorize taxpay-
ers to seek a refund or credit of overpaid
income tax by filing a properly executed
individual income tax return. In the case
of an eligible individual (or married cou-
ple filing jointly) who is not required by
§ 6012(a) or § 6017 to file an income tax
return, but who had qualifying income in
2007 that equals or exceeds $3,000, the
Service will treat a Form 1040A prepared
in the following manner as a valid claim
for refund in the amount of the 2008 eco-
nomic stimulus payment:
1. In the blank space at the top of
page 1 of Form 1040A, eligible individu-
als should write the words “Stimulus Pay-
ment” above the title of the form.
2. Eligible individuals should enter
names, mailing address, and social secu-
rity numbers on the appropriate lines of
Form 1040A and should enter filing sta-
tus and exemption information on lines 1
through 6d of the form.
3. Eligible individuals should enter
wages and other compensation (including
net earnings from self-employment) re-
ceivedin2007online7ofForm1040A.
4. Eligible individuals should enter
qualifying income received in 2007 in
the form of social security benefits, Tier
1 railroad retirement benefits and certain
veterans’ disability or survivor benefits
on line 14a of Form 1040A. Individuals
who do not have documentation of the ex-
act amount of these government-provided
benefits may estimate their annual benefit
by multiplying their monthly benefit, prior
to any deductions for withheld taxes or
Medicare premiums, by the number of
months during 2007 that they received the
benefit.
5. Eligible individuals who are mem-
bers of the Armed Forces of the United
States should enter any nontaxable combat
zone compensation received in 2007 that
they elect to treat as earned income on line
40b of Form 1040A.
6. Eligible individuals who request di-
rect deposit of their economic stimulus
payment into their account at a bank or
other financial institution should complete
lines 44b through 44d of Form 1040A. Eli-
gible individuals may not request a deposit
of the stimulus payment into an account
that is not in the eligible individual’s name.
7. Eligible individuals should sign and
date the form under the penalties of perjury
statement, and shouldenter the identifying
information of any third party designee or
paid preparer, if applicable, at the bottom
of page 2 of Form 1040A.
Basedontheinformationprovidedon
Form 1040A, the Service will compute the
amount of the stimulus payment that will
be refunded or credited.
DRAFTING INFORMATION
The principal author of this notice is
Andrew J. Keyso of the Office of Asso-
ciate Chief Counsel (Income Tax & Ac-
counting). For further information regard-
ing this notice, contact Mr. Keyso at (202)
622–4800 (not a toll-free call).
26 CFR 601.105: Examination of returns and claims
for refund, credit, or abatement; determination of
correct tax liability.
(Also Part 1, § 1031.)
Rev. Proc. 2008–16
SECTION 1. PURPOSE
This revenue procedure provides a safe
harbor under which the Internal Revenue
Service (the “Service”) will not challenge
whether a dwelling unit qualifies as prop-
erty held for productive use in a trade or
business or for investment for purposes of
§ 1031 of the Internal Revenue Code.
SECTION 2. BACKGROUND
.01 Section 1031(a) provides that no
gain or loss is recognized on the exchange
of property held for productive use in a
trade or business or for investment (re-
linquished property) if the property is
exchanged solely for property of like
kind that is to be held either for pro-
ductive use in a trade or business or for
investment (replacement property). Under
§ 1.1031(a)–(1)(a)(1) of the Income Tax
Regulations, property held for productive
use in a trade or business may be ex-
changed for property held for investment,
andpropertyheldforinvestmentmaybe
exchanged for property held for produc-
tive use in a trade or business.
.02 Rev. Rul. 59–229, 1959–2 C.B.
180, concludes that gain or loss from an
exchange of personal residences may not
be deferred under § 1031 because the resi-
dences are not property held for productive
use in a trade or business or for investment.
.03 Section 2.05 of Rev. Proc.
2005–14, 2005–1 C.B. 528, states that
§ 1031 does not apply to property that is
used solely as a personal residence.
.04 InMoore v. Commissioner,T.C.
Memo. 2007–134, the taxpayers ex-
changed one lakeside vacation home for
another. Neither home was ever rented.
March 10, 20085472008–10 I.R.B.

Both were used by the taxpayers only for
personal purposes. The taxpayers claimed
that the exchange of the homes was a
like-kind exchange under § 1031 because
the properties were expected to appreciate
in value and thus were held for invest-
ment. The Tax Court held, however, that
the properties were held for personal use
and that the “mere hope or expectation
that property may be sold at a gain cannot
establish an investment intent if the tax-
payer uses the property as a residence.”
.05 InStarker v. United States,602
F.2d 1341, 1350 (9
th
Cir. 1979), the Ninth
Circuit held that a personal residence of
a taxpayer was not eligible for exchange
under § 1031, explaining that “[it] has long
been the rule that use of property solely
as a personal residence is antithetical to its
being held for investment.”
.06 The Service recognizes that many
taxpayers hold dwelling units primarily for
the production of current rental income,
but also use the properties occasionally for
personal purposes. In the interest of sound
tax administration, this revenue procedure
provides taxpayers with a safe harbor un-
der which a dwelling unit will qualify as
property held for productive use in a trade
or business or for investment under § 1031
even though a taxpayer occasionally uses
the dwelling unit for personal purposes.
SECTION 3. SCOPE
.01In general. This revenue procedure
applies to a dwelling unit, as defined in
section 3.02 of this revenue procedure, that
meets the qualifying use standards in sec-
tion 4.02 of this revenue procedure.
.02Dwelling unit. For purposes of
this revenue procedure, a dwelling unit
is real property improved with a house,
apartment, condominium, or similar im-
provement that provides basic living ac-
commodations including sleeping space,
bathroom and cooking facilities.
SECTION 4. APPLICATION
.01In general. The Service will not
challenge whether a dwelling unit as de-
fined in section 3.02 of this revenue pro-
cedure qualifies under § 1031 as property
held for productive use in a trade or busi-
ness or for investment if the qualifying use
standards in section 4.02 of this revenue
procedure are met for the dwelling unit.
.02Qualifying use standards.
(1)Relinquished property. A dwelling
unit that a taxpayer intends to be relin-
quished property in a § 1031 exchange
qualifies as property held for productive
use in a trade or business or for investment
if:
(a) The dwelling unit is owned by the
taxpayer for at least 24 months immedi-
ately before the exchange (the “qualifying
use period”); and
(b) Within the qualifying use period, in
each of the two 12-month periods immedi-
ately preceding the exchange,
(i) The taxpayer rents the dwelling unit
to another person or persons at a fair rental
for 14 days or more, and
(ii) The period of the taxpayer’s per-
sonal use of the dwelling unit does not ex-
ceed the greater of 14 days or 10 percent
of the number of days during the 12-month
period that the dwelling unit is rented at a
fair rental.
For this purpose, the first 12-month period
immediately preceding the exchange ends
on the day before the exchange takes place
(and begins 12 months prior to that day)
and the second 12-month period ends on
the day before the first 12-month period
begins (and begins 12 months prior to that
day).
(2)Replacement property. A dwelling
unit that a taxpayer intends to be replace-
ment property in a § 1031 exchange quali-
fies as property held for productive use in
a trade or business or for investment if:
(a) The dwelling unit is owned by the
taxpayer for at least 24 months immedi-
ately after the exchange (the “qualifying
use period”); and
(b) Within the qualifying use period, in
each of the two 12-month periods immedi-
ately after the exchange,
(i) The taxpayer rents the dwelling unit
to another person or persons at a fair rental
for 14 days or more, and
(ii) The period of the taxpayer’s per-
sonal use of the dwelling unit does not ex-
ceed the greater of 14 days or 10 percent
of the number of days during the 12-month
period that the dwelling unit is rented at a
fair rental.
For this purpose, the first 12-month period
immediately after the exchange begins on
the day after the exchange takes place and
the second 12-month period begins on the
day after the first 12-month period ends.
.03Personal use. For purposes of
this revenue procedure, personal use of
a dwelling unit occurs on any day on
which a taxpayer is deemed to have used
the dwelling unit for personal purposes
under § 280A(d)(2) (taking into account
§ 280A(d)(3) but not § 280A(d)(4)).
.04Fair rental. For purposes of this
revenue procedure, whether a dwelling
unit is rented at a fair rental is determined
based on all of the facts and circumstances
that exist when the rental agreement is
entered into. All rights and obligations
of the parties to the rental agreement are
taken into account.
.05Special rule for replacement prop-
erty. If a taxpayer files a federal income
tax return and reports a transaction as an
exchange under § 1031, based on the ex-
pectation that a dwelling unit will meet the
qualifying use standards in section 4.02(2)
of this revenue procedure for replacement
property, and subsequently determines that
the dwelling unit does not meet the quali-
fying use standards, the taxpayer, if nec-
essary,shouldfileanamendedreturnand
not report the transaction as an exchange
under § 1031.
.06Limited application of safe harbor.
The safe harbor provided in this revenue
procedure applies only to the determina-
tion of whether a dwelling unit qualifies
as property held for productive use in a
trade or business or for investment under
§ 1031. A taxpayer utilizing the safe har-
bor in this revenue procedure also must
satisfy all other requirements for a like-
kind exchange under § 1031 and the reg-
ulations thereunder.
SECTION 5. EFFECTIVE DATE
This revenue procedure is effective for
exchanges of dwelling units occurring on
or after March 10, 2008. No inference is
intended with respect to the federal income
tax treatment of exchanges of dwelling
units occurring prior to the effective date
of this revenue procedure.
SECTION 6. DRAFTING
INFORMATION
The principal author of this revenue
procedure is J. Peter Baumgarten of the
Office of Associate Chief Counsel (In-
come Tax & Accounting). For further
2008–10 I.R.B.548March 10, 2008

information regarding this revenue pro-
cedure, contact Mr. Baumgarten at (202)
622–4920 (not a toll-free call).
26 CFR 601.201: Rulings and determination letters.
(Also Part 1 sections 25, 103, 143.)
Rev. Proc. 2008–17
SECTION 1. PURPOSE
This revenue procedure provides is-
suers of qualified mortgage bonds, as
defined in section 143(a) of the Internal
Revenue Code, and issuers of mortgage
credit certificates, as defined in section
25(c), with (1) the nationwide average
purchase price for residences located in
the United States, and (2) average area
purchase price safe harbors for residences
located in statistical areas in each state,
the District of Columbia, Puerto Rico,
the Northern Mariana Islands, American
Samoa, the Virgin Islands, and Guam.
SECTION 2. BACKGROUND
.01 Section 103(a) provides that, except
as provided in section 103(b), gross in-
come does not include interest on any state
or local bond. Section 103(b)(1) provides
that section 103(a) shall not apply to any
private activity bond that is not a “qualified
bond” within the meaning of section 141.
Section 141(e) provides, in part, that the
term “qualified bond” means any private
activity bond if such bond (1) is a quali-
fied mortgage bond under section 143, (2)
meets the volume cap requirements under
section 146, and (3) meets the applicable
requirements under section 147.
.02 Section 143(a)(1) provides that the
term “qualified mortgage bond” means a
bond that is issued as part of a qualified
mortgage issue. Section 143(a)(2)(A) pro-
vides that the term “qualified mortgage is-
sue” means an issue of one or more bonds
by a state or political subdivision thereof,
but only if: (i) all proceeds of the issue (ex-
clusive of issuance costs and a reasonably
required reserve) are to be used to finance
owner-occupied residences; (ii) the issue
meets the requirements of subsections (c),
(d), (e), (f), (g), (h), (i), and (m)(7) of sec-
tion 143; (iii) the issue does not meet the
private business tests of paragraphs (1) and
(2) of section 141(b); and (iv) with respect
to amounts received more than 10 years
after the date of issuance, repayments of
$250,000 or more of principal on mortgage
financing provided by the issue are used by
the close of the first semiannual period be-
ginning after the date the prepayment (or
complete repayment) is received to redeem
bonds that are part of the issue.
Average Area Purchase Price
.03 Section 143(e)(1) provides that an
issue of bonds meets the purchase price
requirements of section 143(e) if the ac-
quisition cost of each residence financed
by the issue does not exceed 90 percent of
the average area purchase price applicable
to such residence. Section 143(e)(5) pro-
vides that, in the case of a targeted area res-
idence (as defined in section 143(j)), sec-
tion 143(e)(1) shall be applied by substi-
tuting 110 percent for 90 percent.
.04 Section 143(e)(2) provides that the
term “average area purchase price” means,
with respect to any residence, the average
purchase price of single-family residences
(in the statistical area in which the resi-
dence is located) that were purchased dur-
ing the most recent 12-month period for
which sufficient statistical information is
available. Under sections 143(e)(3) and
(4), respectively, separate determinations
are to be made for new and existing resi-
dences, and for two-, three-, and four-fam-
ily residences.
.05 Section 143(e)(2) provides that the
determination of the average area purchase
price for a statistical area shall be made as
of the date on which the commitment to
provide the financing is made or, if earlier,
the date of the purchase of the residence.
.06 Section 143(k)(2)(A) provides that
the term “statistical area” means (i) a
metropolitan statistical area (MSA), and
(ii) any county (or the portion thereof)
that is not within an MSA. Section
143(k)(2)(C) further provides that if suf-
ficient recent statistical information with
respect to a county (or portion thereof)
is unavailable, the Secretary may sub-
stitute another area for which there is
sufficient recent statistical information for
such county (or portion thereof). In the
case of any portion of a State which is
not within a county, section 143(k)(2)(D)
provides that the Secretary may designate
as a county any area that is the equivalent
of a county. Section 6a.103A–1(b)(4)(i)
of the Temporary Income Tax Regulations
(issued under section 103A of the Internal
Revenue Code of 1954, the predecessor of
section 143) provides that the term “State”
includes a possession of the United States
and the District of Columbia.
.07 Section 6a.103A–2(f)(5)(i) pro-
vides that an issuer may rely upon the aver-
age area purchase price safe harbors pub-
lished by the Department of the Treasury
for the statistical area in which a residence
is located. Section 6a.103A–2(f)(5)(i)
further provides that an issuer may use
an average area purchase price limitation
different from the published safe harbor if
the issuer has more accurate and compre-
hensive data for the statistical area.
Qualified Mortgage Credit Certificate
Program
.08 Section 25(c) permits a state or
political subdivision to establish a quali-
fied mortgage credit certificate program.
In general, a qualified mortgage credit
certificate program is a program under
which the issuing authority elects not to
issue an amount of private activity bonds
that it may otherwise issue during the
calendar year under section 146, and in
their place, issues mortgage credit certifi-
cates to taxpayers in connection with the
acquisition of their principal residences.
Section 25(a)(1) provides, in general, that
the holder of a mortgage credit certificate
may claim a federal income tax credit
equal to the product of the credit rate
specified in the certificate and the interest
paid or accrued during the tax year on the
remaining principal of the indebtedness
incurred to acquire the residence. Section
25(c)(2)(A)(iii)(III) generally provides
that residences acquired in connection
with the issuance of mortgage credit cer-
tificates must meet the purchase price
requirements of section 143(e).
Income Limitations for Qualified
Mortgage Bonds and Mortgage Credit
Certificates
.09 Section 143(f) imposes limitations
on the income of mortgagors for whom
financing may be provided by qualified
mortgage bonds. In addition, section
25(c)(2)(A)(iii)(IV) provides that holders
of mortgage credit certificates must meet
the income requirement of section 143(f).
March 10, 20085492008–10 I.R.B.

Generally, under sections 143(f)(1) and
25(c)(2)(A)(iii)(IV), the income require-
ment is met only if all owner-financing
under a qualified mortgage bond and all
mortgage credit certificates issued under a
qualified mortgage credit certificate pro-
gram are provided to mortgagors whose
family income is 115 percent or less of the
applicable median family income. Section
143(f)(5), however, generally provides
for an upward adjustment to the percent-
age limitation in high housing cost areas.
High housing cost areas are defined in
section 143(f)(5)(C) as any statistical area
for which the housing cost/income ratio is
greater than 1.2.
.10 Under section 143(f)(5)(D), the
housing cost/income ratio with respect to
any statistical area is determined by divid-
ing (a) the applicable housing price ratio
for such area by (b) the ratio that the area
median gross income for such area bears
to the median gross income for the United
States. The applicable housing price ratio
is the new housing price ratio (new hous-
ing average area purchase price divided by
the new housing average purchase price
for the United States) or the existing hous-
ing price ratio (existing housing average
area purchase price divided by the existing
housing average purchase price for the
United States), whichever results in the
housing cost/income ratio being closer to
1.
Average Area and Nationwide Purchase
Price Limitations
.11 Average area purchase price safe
harbors for each state, the District of Co-
lumbia, Puerto Rico, the Northern Mari-
ana Islands, American Samoa, the Virgin
Islands, and Guam were last published in
Rev. Proc. 2007–26, 2007–13 I.R.B. 814.
.12 The nationwideaverage purchase
price limitation was last published in
section 4.02 of Rev. Proc. 2007–26.
Guidance with respect to the United States
and area median grossincome figures that
aretobeusedincomputingthehousing
cost/income ratio described in section
143(f)(5) was last published in Rev. Proc.
2007–31, 2007–19 I.R.B. 1225.
.13 This revenue procedure uses FHA
loan limits for a given statistical area to
calculate the average area purchase price
safe harbor for that area. FHA sets lim-
its on the dollar value of loans it will in-
sure based on median home prices and
conforming loan limits established by the
Federal Home Loan Mortgage Corpora-
tion. In particular, FHA sets an area’s
loan limit at 95 percent of the median home
sales price for the area, subject to certain
floors and caps measured against conform-
ing loan limits.
.14 To calculate the average area pur-
chase price safe harbors in this revenue
procedure, the FHAloan limits are ad-
justed to take into account the differences
between average and median purchase
prices. Because FHA loan limits do not
differentiate between new and existing
residences, this revenue procedure con-
tains a single average area purchase price
safe harbor for both new and existing
residences in a statistical area. The Trea-
sury Department and the Internal Revenue
Service have determined that FHA loan
limits provide a reasonable basis for de-
termining average area purchase price
safe harbors. If the Treasury Department
and the Internal Revenue Service become
aware of other sources of average purchase
price data, including data that differentiate
between new and existing residences, con-
sideration will be given as to whether such
data provide a more accurate method for
calculating average area purchase price
safe harbors.
.15 The average area purchase price
safeharborslistedinsection4.01ofthis
revenue procedure are based on FHA loan
limits released January 18, 2008. FHA
loan limits are available for statistical ar-
eas in each state, the District of Columbia,
Puerto Rico, the Northern Mariana Islands,
American Samoa, the Virgin Islands, and
Guam. See section 3.03 of this revenue
procedure with respect to FHA loan lim-
its revised after January 18, 2008.
.16 OMB Bulletin No. 03–04, dated
and effective June 6, 2003, revised the def-
initions of the nation’s metropolitan areas
and recognized 49 new metropolitan sta-
tistical areas. The OMB bulletin no longer
includes primary metropolitan statistical
areas.
SECTION 3. APPLICATION
Average Area Purchase Price Safe
Harbors
.01 Average area purchase price safe
harbors for statistical areas in each state,
the District of Columbia, Puerto Rico,
the Northern Mariana Islands, American
Samoa, the Virgin Islands, and Guam are
set forth in section 4.01 of this revenue
procedure. Average area purchase price
safe harbors are provided for single-family
and two to four-family residences. For
each type of residence, section 4.01 of this
revenue procedure contains a single safe
harbor that may be used for both new and
existing residences. Issuers of qualified
mortgage bonds and issuers of mortgage
credit certificates may rely on these safe
harbors to satisfy the requirements of sec-
tions 143(e) and (f). Section 4.01 of this
revenue procedure provides safe harbors
for MSAs and for certain counties and
county equivalents. If no purchase price
safe harbor is available for a statistical
area, the safe harbor for “ALL OTHER
AREAS” may be used for that statistical
area (except for Alaska, for which a sepa-
rate safe harbor is provided for statistical
areas not listed).
.02IfaresidenceisinanMSA,thesafe
harbor applicable to it is the limitation of
that MSA. If an MSA falls in more than
one state, the MSA is listed in section 4.01
of this revenue procedure under each state.
.03 If the FHA revises the FHA loan
limit for any statistical area after January
18, 2008, an issuer of qualified mortgage
bonds or mortgage credit certificates may
use the revised FHA loan limit for that
statistical area to compute (as provided in
the next sentence) a revised average area
purchase price safe harbor for the statisti-
cal area provided that the issuer maintains
records evidencing the revised FHA loan
limit. The revised average area purchase
price safe harbor for that statistical area
is computed by dividing the revised FHA
loan limit by .76.
.04 If, pursuant to section
6a.103A–2(f)(5)(i), an issuer uses more
accurate and comprehensive data to
determine the average area purchase price
for a statistical area, the issuer must make
separate average area purchase price
determinations for new and existing resi-
dences. Moreover, when computing the
average area purchase price for a statistical
area that is an MSA, as defined in OMB
Bulletin No. 03–04, the issuer must make
the computation for the entire applicable
MSA. When computing the average area
purchase price for a statistical area that
is not an MSA, the issuer must make the
2008–10 I.R.B.550March 10, 2008

computation for the entire statistical area
and may not combine statistical areas.
Thus, for example, the issuer may not
combine two or more counties.
.05 If an issuer receives a ruling permit-
ting it to rely on an average area purchase
price limitation that is higher than the
applicable safe harbor in this revenue
procedure, the issuer may rely on that
higher limitation for the purpose of satis-
fying the requirements of section 143(e)
and (f) for bonds sold, and mortgage
credit certificates issued, not more than 30
months following the termination date of
the12-monthperiodusedbytheissuerto
compute the limitation.
Nationwide Average Purchase Price
.06 Section 4.02 of this revenue proce-
dure sets forth a single nationwide average
purchase price for purposes of computing
the housing cost/income ratio under sec-
tion 143(f)(5).
.07 Issuers must use the nationwide av-
erage purchase price set forth in section
4.02 of this revenue procedure when com-
puting the housing cost/income ratio un-
der section 143(f)(5) regardless of whether
they are relying on the average area pur-
chase price safe harbors contained in this
revenue procedure or using more accurate
and comprehensive data to determine av-
erage area purchase prices for new and ex-
isting residences for a statistical area that
are different from the published safe har-
bors in this revenue procedure.
.08 If, pursuant to section 6.02 of this
revenue procedure, an issuer relies on the
average area purchase price safe harbors
contained in Rev. Proc. 2007–26, the is-
suer must use the nationwide average pur-
chase price set forth in section 4.02 of Rev.
Proc. 2007–26 in computing the housing
cost/income ratio under section 143(f)(5).
Likewise, if, pursuant to section 6.05 of
this revenue procedure, an issuer relies
on the nationwide average purchase price
published in Rev. Proc. 2007–26, the is-
suer may not rely on the average area pur-
chase price safe harbors published in this
revenue procedure.
SECTION 4. AVERAGE AREA AND
NATIONWIDE AVERAGE PURCHASE
PRICES
.01 Average area purchase prices for
single-family and two to four-family res-
idences in MSAs, and for certain counties
and county equivalents are set forth below.
The safe harbor for “ALL OTHER AR-
EAS” (found at the end of the table below)
may be used for a statistical area that is not
listed below.
STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
AKANCHORAGE, AK (MSA)ANCHORAGE346,842390,658474,671547,697
NON-METRODENALI316,137404,668489,126607,879
FAIRBANKS, AK (MSA)FAIRBANKS NORTH 316,250356,197432,763506,495
JUNEAU, AK (MICRO)JUNEAU398,750449,118545,658629,605
KODIA
K, AK (MICRO)
KODIA
K ISLAND
318,7
50
359,0
13
436,1
84
506,4
95
ANCHORAGE, AK (MSA)MATANUSKA-SUSIT 346,842390,658474,671547,697
NON-METROSITKA431,250485,724590,132680,921
NON-METROYAKUTAT CITY316,137404,668489,126607,879
AZNON-METROAPACHE281,250337,168407,558506,495
FLA
GSTAFF, AZ (MSA)
COC
ONINO
450
,000
506
,842
615
,789
710
,526
PAYSON, AZ (MICRO)GILA325,000366,053444,737513,158
PHOENIX-MESA-SCOTTSDALE,
AZ (MSA)MARICOPA346,250389,987473,816546,711
LAKE HAVASU CITY-KINGMAN,
AZ (MICRO)MOHAVE321,842362,500440,461508,224
NON-METRONAVAJO307,684346,553421,041506,495
TUCSON, AZ (MSA)PIMA315,592355,461431,908506,495
P
HOENIX-MESA-SCOTTSDALE,
A
Z(MSA)
P
INAL
3
46,250
3
89,987
4
73,816
5
46,711
PRESCOTT, AZ (MSA)YAVAPAI389,250438,418532,658614,605
CAOAKLAND-FREMONT-
HAYWARD, CA METROPOLITAN
DIVISION
ALAMEDA477,355611,117738,699918,021
NON-METROALPINE477,355611,117738,699918,021
NON-METROAMADOR443,750506,842615,789710,526
CHICO, CA (MSA)BUTTE400,000450,526547,368631,579
NON-METROCALAVERAS477,355550,461668,816774,671
NON-METROCOLUSA397,500447,711543,947627,632
March 10, 20085512008–10 I.R.B.

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
OAKLAND-FREMONT-
HAYWARD, CA METROPOLITAN
DIVISIONCONTRA COSTA477,355611,117738,699918,021
CRESCENT CITY, CA (MICRO)DEL NORTE311,250350,566425,921506,495
SACRAMENTO-ARDEN-
ARCADE-ROSEVILLE, CA
(MSA)EL DORADO477,355587,092713,289823,026
FRESNO, CA (MSA)FRESNO381,250429,408521,711601,974
NON-METROGLENN286,842337,168407,558506,495
EUREKA-ARCATA-FORTUNA,
CA (MICRO)HUMBOLDT393,750443,487538,816621,711
EL CENTRO, CA (MSA)IMPERIAL308,750347,750422,500506,495
BISHOP, CA (MICRO)INYO477,355542,039658,553759,868
BAKERSFIELD, CA (MSA)KERN368,750415,329504,605582,237
HANFORD-CORCORAN, CA
(MSA)KINGS312,316351,766427,379506,495
CLEARLAKE, CA (MICRO)LAKE401,250451,934549,079633,553
SUSANVILLE, CA (MICRO)LASSEN285,000337,168407,558506,495
LOS ANGELES-LONG
BEACH-GLENDALE, CA
METROPOLITAN DIVISIONLOS ANGELES477,355611,117738,699918,021
MADERA, CA (MSA)MADERA425,000478,684581,579671,053
SAN FRANCISCO-SAN
MATEO-REDWOOD CITY,
CA METROPOLITANMARIN477,355611,117738,699918,021
NON-METROMARIPOSA411,704464,605564,474651,316
UKIAH, CA (MICRO)MENDOCINO477,355563,158684,211789,474
MERCED, CA (MSA)MERCED471,557531,122645,288744,564
NON-M
ETRO
MONO477,3
55
611,1
17
738,6
99
918,0
21
SALINAS, CA (MSA)MONTEREY477,355611,117738,699918,021
NAPA, CA (MSA)NAPA477,355611,117738,699918,021
TRUCKEE-GRASS VALLEY, CA
(MICRO)NEVADA477,355611,117738,699918,021
SANTA ANA-ANAHEIM-IRVINE,
CA METROPOLITAN DIVISION ORANGE477,355611,117738,699918,021
SACRAMENTO-ARDEN-
ARCADE-ROSEVILLE, CA
(MSA)PLACER477,355587,092713,289823,026
NON-METROPLUMAS410,000461,789561,053647,368
RIVERSIDE-SAN
BERNARDINO-ONTARIO,
CA (MSA)RIVERSIDE477,355561,711682,500787,500
SA
CRAMENTO-ARDEN-
AR
CADE-ROSEVILLE, CA
(M
SA)
SA
CRAMENTO
47
7,355
58
7,092
71
3,289
82
3,026
SAN JOSE-SUNNYVALE-SANTA
CLARA, CA (MSA)SAN BENITO477,355611,117738,699918,021
RIVERSIDE-SAN
BERNARDINO-ONTARIO,
CA (MSA)SAN BERNARDINO 477,355561,711682,500787,500
SAN DIEGO-CARLSBAD-SAN
MARCOS, CA (MSA)SAN DIEGO477,355611,117738,699918,021
SAN FRANCISCO-SAN
MATEO-REDWOOD CITY,
CA METROPOLITANSAN FRANCISCO477,355611,117738,699918,021
2008–10 I.R.B.552March 10, 2008

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
STOCKTON, CA (MSA)SAN JOAQUIN477,355549,079667,105769,737
SAN LUIS OBISPO-PASO
ROBLES, CA (MSA)SAN LUIS OBISPO477,355611,117738,699918,021
SAN FRANCISCO
-SAN
MATEO-REDWOO
DCITY,
CA METROPOLIT
AN
SAN MATEO477,355611,117738,699918,021
SANTA BARBARA-SANTA
MARIA, CA (MSA)SANTA BARBARA477,355611,117738,699918,021
SAN JOSE-SUN
NYVALE-SANTA
CLARA, CA (MS
A)
SANTA CLARA477,355611,117738,699918,021
SANTA CRUZ-WATSONVILLE,
CA (MSA)SANTA CRUZ477,355611,117738,699918,021
REDDING, CA (MSA)SHASTA423,625477,136579,697668,882
NON-METROSIERRA281,250337,168407,558506,495
NON-METROSISKIYOU293,750337,168407,558506,495
VALLEJO-FAIRFIELD, CA (MSA) SOLANO477,355611,117738,699907,895
SANTA ROSA-PETALUMA, CA
(MSA)SONOMA477,355611,117738,699918,021
MODESTO, CA (MSA)STANISLAUS477,355537,653653,222753,718
YUBA CITY
,CA(MSA)
SUTTER424,680478,325581,142670,549
RED BLUFF, CA (MICRO)TEHAMA312,500351,974427,632506,495
VISALIA-PORTERVILLE, CA
(MSA)TULARE325,000366,053444,737513,158
PHOENIX LAKE-CEDAR RIDGE,
CA (MICRO)TUOLUMNE437,500492,763598,684690,789
OXNARD-THOUSAND
OAKS-VENTURA, CA (MSA)VENTURA477,355611,117738,699918,021
SACRAMENTO-ARDEN-
ARCADE-ROSEVILLE, CA
(MSA)YOLO477,355587,092713,289823,026
YUBA CITY, CA (MSA)YUBA424,680478,325581,142670,549
CODENVE
R-AURORA, CO (MSA)
ADAMS405,7
50
457,0
03
555,2
37
640,6
58
DENVER-AURORA, CO (MSA)ARAPAHOE405,750457,003555,237640,658
NON-METROARCHULETA263,487337,168407,558506,495
BOULDER, CO (MSA)BOULDER459,375517,401628,618725,329
DENVER-AURORA, CO (MSA)BROOMFIELD405,750457,003555,237640,658
DENVER-AURORA, CO (MSA)CLEAR CREEK405,750457,003555,237640,658
DEN
VER-AURORA, CO (MSA)
DEN
VER
405
,750
457
,003
555
,237
640
,658
DENVER-AURORA, CO (MSA)DOUGLAS405,750457,003555,237640,658
EDWARDS, CO (MICRO)EAGLE477,355537,653653,222753,718
COLORADO SPRINGS, CO (MSA) EL PASO325,000366,053444,737513,158
DENVER-AURORA, CO (MSA)ELBERT405,750457,003555,237640,658
NON-METROGARFIELD393,209442,878538,075620,857
D
ENVER-AURORA, CO (MSA)
G
ILPIN
4
05,750
4
57,003
5
55,237
6
40,658
NON-METROGRAND293,750337,168407,558506,495
DENVER-AURORA, CO (MSA)JEFFERSON405,750457,003555,237640,658
DURANGO, CO (MICRO)LA PLATA443,750499,803607,237700,658
EDWARDS, CO (MICRO)LAKE477,355537,653653,222753,718
FORT COLLINS-LOVELAND, CO
(MSA)LARIMER312,500351,974427,632506,495
GRAND JUNCTION, CO (MSA)MESA371,250418,145508,026586,184
DENVER-AURORA, CO (MSA)PARK405,750457,003555,237640,658
NON-METROPITKIN381,999488,975591,028734,521
March 10, 20085532008–10 I.R.B.

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
NON-METROROUTT398,026448,303544,667628,462
NON-METROSAN MIGUEL477,355611,117738,699918,021
SILVERTHORNE
,CO(MICRO)
SUMMIT431,250485,724590,132680,921
COLORADO SPRINGS, CO (MSA) TELLER325,000366,053444,737513,158
GREELEY, CO (MSA)WELD416,547469,163570,012657,707
CTBRIDGEPORT-STAMFORD-
NORWALK, CT (MSA)
FAIRFIELD477,355611,117738,699918,021
HARTFORD-WEST
HARTFORD-EAST HARTFORD,
CT (MSA)HARTFORD439,125494,593600,908693,355
TORRINGTON, CT (MICRO)LITCHFIELD375,000422,368513,158592,105
HARTFORD-WEST
HARTFORD-EAST HARTFORD,
CT (MSA)MIDDLESEX439,125494,593600,908693,355
NEW HAVEN-
MILFORD, CT
(MSA)NEW HAVEN387,500436,447530,263611,842
NORWICH-NEW LONDON, CT
(MSA)NEW LONDON398,750449,118545,658629,605
HARTFORD-WEST
HARTFORD-EAST HARTFORD,
CT (MSA)TOLLAND439,125494,593600,908693,355
DCWASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METRO
DISTRI
CT OF COL
477,35
5
611,11
7
738,69
9
888,15
8
DEDOVER, DE (MSA)KENT375,093422,474513,286592,253
WILMINGTON, DE-MD-NJ
METROPOLITAN DIVISIONNEW CASTLE385,112433,758526,996608,072
SEAFO
RD, DE (MICRO)
SUSSE
X
325,0
00
366,0
53
444,7
37
513,1
58
FLGAINESVILLE, FL (MSA)ALACHUA269,000337,168407,558506,495
JACKSONVILLE, FL (MSA)BAKER387,500436,447530,263611,842
PANA
MA CITY-LYNN HAVEN,
FL (M
SA)
BAY396,
000
446,
021
541,
895
625,
263
PALM BAY-MELBOURNE-
TITUSVILLE, FL (MSA)BREVARD291,250337,168407,558506,495
FOR
T LAUDERDALE-POMPANO
BEA
CH-DEERFIELD BEACH, FL
BRO
WARD
477
,355
544
,336
661
,343
763
,088
PUNTA GORDA, FL (MSA)CHARLOTTE295,012337,168407,558506,495
JACKSONVILLE, FL (MSA)CLAY387,500436,447530,263611,842
NAPLES-MARCO ISLAND, FL
(MSA)COLLIER477,355563,017684,039789,276
JA
CKSONVILLE, FL (MSA)
DU
VAL
38
7,500
43
6,447
53
0,263
61
1,842
PALM COAST, FL (MICRO)FLAGLER287,500337,168407,558506,495
GAINESVILLE, FL (MSA)GILCHRIST269,000337,168407,558506,495
TAMPA-ST. PETERSBURG-
CLEARWATER, FL (MSA)HERNANDO292,500337,168407,558506,495
TAMPA-ST. PETERSBURG-
CLEARWATER, FL (MSA)HILLSBOROUGH292,500337,168407,558506,495
SEBASTIAN-VERO BEACH, FL
(MSA)INDIAN RIVER281,250337,168407,558506,495
2008–10 I.R.B.554March 10, 2008

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
ORLANDO-KISSI
MMEE, FL
(MSA)LAKE353,750398,434484,079558,553
CAPE CORAL-FORT MYERS, FL
(MSA)LEE356,250401,250487,500562,500
SARASOTA-BRA
DENTON-
VENICE, FL (MS
A)
MANATEE442,237498,097605,166698,268
PORT ST. LUCIE-FORT PIERCE,
FL (MSA)MARTIN364,000409,979498,105574,737
MIAMI-MIAMI BEACH-
KENDALL, FL METROPOLITAN
DIVISIONMIAMI-DADE477,355544,336661,343763,088
KEY WEST-MARATHON, FL
(MICRO)MONROE477,355611,117738,699918,021
JACKSONVILL
E, FL (MSA)
NASSAU387,500436,447530,263611,842
FORT WALTON BEACH-
CRESTVIEW-DESTIN, FL (MSA) OKALOOSA312,375351,833427,461506,495
ORLANDO-KI
SSIMMEE, FL
(MSA)ORANGE353,750398,434484,079558,553
ORLANDO-KISSIMMEE, FL
(MSA)OSCEOLA353,750398,434484,079558,553
WEST PALM BEACH-BOCA
RATON-BOYNTON BEACH, FL
METROPALM BEACH477,355544,336661,343763,088
TAMPA-ST. PETERSBURG-
CLEARWATER, FL (MSA)PASCO292,500337,168407,558506,495
TAMPA-ST. PETERSBURG-
CLEARWATER, FL (MSA)PINELLAS292,500337,168407,558506,495
LAKELAND, FL (MSA)POLK270,000337,168407,558506,495
SARASOTA
-BRADENTON-
VENICE, F
L(MSA)
SARASOTA442,237498,097605,166698,268
ORLANDO-KISSIMMEE, FL
(MSA)SEMINOLE353,750398,434484,079558,553
JACKSONVILLE, FL (MSA)ST. JOHNS387,500436,447530,263611,842
PORT ST. LUCIE-FORT PIERCE,
FL (MSA)ST. LUCIE364,000409,979498,105574,737
THE VILLAGES, FL (MICRO)SUMTER278,125337,168407,558506,495
DELTONA-DAYTONA
BEACH-ORMOND BEACH,
FL (MSA)VOLUSIA302,864341,121414,446506,495
NON-METROWALTON477,355538,520654,276791,700
GAATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)
BARR
OW
332,
750
374,
782
455,
342
525,
395
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)BARTOW332,750374,782455,342525,395
BRUN
SWICK, GA (MSA)
BRAN
TLEY
275,
921
337,
168
407,
558
506,
495
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)BUTTS332,750374,782455,342525,395
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)CARROLL332,750374,782455,342525,395
March 10, 20085552008–10 I.R.B.

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)CHEROKEE332,750374,782455,342525,395
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)CLAYTON332,750374,782455,342525,395
ATLANTA-SAND
Y
SPRINGS-MAR
IETTA, GA
(MSA)COBB332,750374,782455,342525,395
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)COWETA332,750374,782455,342525,395
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)DAWSON332,750374,782455,342525,395
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)DEKALB332,750374,782455,342525,395
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)DOUGLAS332,750374,782455,342525,395
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)FAYETTE332,750374,782455,342525,395
ATLANTA-
SANDY
SPRINGS-
MARIETTA, GA
(MSA)FORSYTH332,750374,782455,342525,395
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)FULTON332,750374,782455,342525,395
BRUNSWI
CK, GA (MSA)
GLYNN275,921337,168407,558506,495
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)GWINNETT332,750374,782455,342525,395
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)HARALSON332,750374,782455,342525,395
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)HEARD332,750374,782455,342525,395
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)HENRY332,750374,782455,342525,395
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)JASPER332,750374,782455,342525,395
ATLA
NTA-SANDY
SPRI
NGS-MARIETTA, GA
(MSA
)
LAMA
R
332,
750
374,
782
455,
342
525,
395
BRUNSWICK, GA (MSA)MCINTOSH275,921337,168407,558506,495
ATL
ANTA-SANDY
SPR
INGS-MARIETTA, GA
(MS
A)
MER
IWETHER
332
,750
374
,782
455
,342
525
,395
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)NEWTON332,750374,782455,342525,395
2008–10 I.R.B.556March 10, 2008

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)PAULDING332,750374,782455,342525,395
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)PICKENS332,750374,782455,342525,395
ATLANTA-SAND
Y
SPRINGS-MAR
IETTA, GA
(MSA)PIKE332,750374,782455,342525,395
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)ROCKDALE332,750374,782455,342525,395
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)SPALDING332,750374,782455,342525,395
ATLANTA-SANDY
SPRINGS-MARIETTA, GA
(MSA)WALTON332,750374,782455,342525,395
HIHILO, HI (MICRO)HAWAII618,750696,908846,711976,974
HONOLULU
,HI(MSA)
HONOLULU716,033865,9291,052,06
3
1,213,91
8
KAPAA, HI (MICRO)KAUAI716,033851,7761,034,868 1,194,079
KAHULUI-WAILUKU, HI
(MICRO)MAUI716,033840,4611,021,184 1,178,289
IDBOISE CI
TY-NAMPA, ID (MSA)
ADA303,750342,118415,658506,495
NON-METROBLAINE477,355584,276709,868819,079
BOISE CITY-NAMPA, ID (MSA) BOISE303,750342,118415,658506,495
BOISE CITY-NAMPA, ID (MSA) CANYON303,750342,118415,658506,495
BOISE CITY-NAMPA, ID (MSA) GEM303,750342,118415,658506,495
COEUR D’ALENE, ID (MSA)KOOTENAI286,250337,168407,558506,495
BOISE
CITY-NAMPA, ID (MSA)
OWYHE
E
303,7
50
342,1
18
415,6
58
506,4
95
JACKSON, WY-ID (MICRO)TETON477,355611,117738,699918,021
NON-METROVALLEY416,842469,495570,461658,224
ILST. LOUIS, MO-IL (MSA)BOND281,250337,168407,558506,495
ST. LOUIS, MO-IL (MSA)CALHOUN281,250337,168407,558506,495
ST.
LOUIS, MO-IL (MSA)
CLI
NTON
281
,250
337
,168
407
,558
506
,495
CHICAGO-NAPERVILLE-JOLIET,
IL METROPOLITAN DIVISIONCOOK362,105407,845495,512571,745
CH
ICAGO-NAPERVILLE-JOLIET,
IL
METROPOLITAN DIVISION
DE
KALB
36
2,105
40
7,845
49
5,512
57
1,745
CHICAGO-NAPERVILLE-JOLIET,
IL METROPOLITAN DIVISIONDUPAGE362,105407,845495,512571,745
CH
ICAGO-NAPERVILLE-JOLIET,
IL
METROPOLITAN DIVISION
GR
UNDY
36
2,105
40
7,845
49
5,512
57
1,745
ST. LOUIS, MO-IL (MSA)JERSEY281,250337,168407,558506,495
CHICAGO-NAPERVILLE-JOLIET,
IL METROPOLITAN DIVISIONKANE362,105407,845495,512571,745
CHICAGO-NAPERVILLE-JOLIET,
IL METROPOLITAN DIVISIONKENDALL362,105407,845495,512571,745
L
AKE COUNTY-KENOSHA
COUNTY, IL-WI METROPOLITAN
DIVLAKE362,105407,845495,512571,745
ST. LOUIS, MO-IL (MSA)MACOUPIN281,250337,168407,558506,495
March 10, 20085572008–10 I.R.B.

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
ST. LOUIS, MO-IL (MSA)MADISON281,250337,168407,558506,495
CHICAGO-NAPERVILLE-JOLIET,
IL METROPOLITAN DIVISIONMCHENRY362,105407,845495,512571,745
ST. LOUIS, MO-IL (MSA)MONROE281,250337,168407,558506,495
ST. LOUIS, MO-IL (MSA)ST. CLAIR281,250337,168407,558506,495
CHICAGO-NAPE
RVILLE-JOLIET,
IL METROPOLI
TAN DIVISION
WILL362,105407,845495,512571,745
INLOUISVILLE-JEFFERON
COUNTY, KY-IN (MSA)
CLARK301,875340,007413,092506,495
CINCINNATI-MIDDLETOWN,
OH-KY-IN (MSA)DEARBORN337,500380,132461,842532,895
LOUISVILLE-JEFFERON
COUNTY, KY-IN (MSA)FLOYD301,875340,007413,092506,495
CINCINNATI-MIDDLETOWN,
OH-KY-IN (MSA)FRANKLIN337,500380,132461,842532,895
LOUISVILLE-JEFFERON
COUNTY, KY-IN (MSA)HARRISON301,875340,007413,092506,495
GARY, IN METROPOLITAN
DIVISIONJASPER362,105407,845495,512571,745
GARY, IN METROPOLITAN
DIVISIONLAKE362,105407,845495,512571,745
GARY, IN METROPOLITAN
DIVISIONNEWTON362,105407,845495,512571,745
CINCINNATI-MIDDLETOWN,
OH-KY-IN (MSA)OHIO337,500380,132461,842532,895
GARY, IN METROPOLITAN
DIVISIONPORTER362,105407,845495,512571,745
LOUISVILLE-JEFFERON
COUNTY, KY-IN (MSA)WASHINGTON301,875340,007413,092506,495
KSKANSAS CITY, MO-KS (MSA)FRANKLIN268,750337,168407,558506,495
KANSAS CITY, MO-KS (MSA)JOHNSON268,750337,168407,558506,495
KANSAS
CITY, MO-KS (MSA)
LEAVEN
WORTH
268,75
0
337,16
8
407,55
8
506,49
5
KANSAS CITY, MO-KS (MSA)LINN268,750337,168407,558506,495
KANSAS CITY, MO-KS (MSA)MIAMI268,750337,168407,558506,495
KANSAS CITY, MO-KS (MSA)WYANDOTTE268,750337,168407,558506,495
KYCINCINNATI-MIDDLETOWN,
OH-KY-IN (MSA)
BOONE337,500380,132461,842532,895
CINCINNATI-MIDDLETOWN,
OH-KY-IN (MSA)BRACKEN337,500380,132461,842532,895
LOUISVILLE-JEFFERON
COUNTY, KY-IN (MSA)BULLITT301,875340,007413,092506,495
CINCINNATI-MIDDLETOWN,
OH-KY-IN (MSA)CAMPBELL337,500380,132461,842532,895
CINCINNATI-MIDDLETOWN,
OH-KY-IN (MSA)GALLATIN337,500380,132461,842532,895
CINCINNATI-MIDDLETOWN,
OH-KY-IN (MSA)GRANT337,500380,132461,842532,895
LOUISVILLE-JEFFERON
COUNTY, KY-IN (MSA)HENRY301,875340,007413,092506,495
LOUISVILLE-JEFFERON
COUNTY, KY-IN (MSA)JEFFERSON301,875340,007413,092506,495
2008–10 I.R.B.558March 10, 2008

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
CINCINNATI-MI
DDLETOWN,
OH-KY-IN (MSA)KENTON337,500380,132461,842532,895
LOUISVILLE-JEFFERON
COUNTY, KY-IN (MSA)MEADE301,875340,007413,092506,495
LOUISVILLE-J
EFFERON
COUNTY, KY-IN
(MSA)
NELSON301,875340,007413,092506,495
LOUISVILLE-JEFFERON
COUNTY, KY-IN (MSA)OLDHAM301,875340,007413,092506,495
CINCINNATI-M
IDDLETOWN,
OH-KY-IN (MS
A)
PENDLETON337,500380,132461,842532,895
LOUISVILLE-JEFFERON
COUNTY, KY-IN (MSA)SHELBY301,875340,007413,092506,495
LOUISVILLE-
JEFFERON
COUNTY, KY-I
N(MSA)
SPENCER301,875340,007413,092506,495
LOUISVILLE-JEFFERON
COUNTY, KY-IN (MSA)TRIMBLE301,875340,007413,092506,495
LANEW ORLEANS-METAIRIE-
KENNER, LA (MSA)
JEFFERSON287,500337,168407,558506,495
NEW ORLEANS-METAIRIE-
KENNER, LA (MSA)ORLEANS287,500337,168407,558506,495
NEW ORLEANS-METAIRIE-
KENNER, LA (MSA)PLAQUEMINES287,500337,168407,558506,495
NEW ORLEANS-METAIRIE-
KENNER, LA (MSA)ST. BERNARD287,500337,168407,558506,495
NEW ORLEANS-METAIRIE-
KENNER, LA (MSA)ST. CHARLES287,500337,168407,558506,495
NEW ORLEANS-METAIRIE-
KENNER, LA (MSA)ST. JOHN THE BA287,500337,168407,558506,495
NEW ORLEANS-METAIRIE-
KENNER, LA (MSA)ST. TAMMANY287,500337,168407,558506,495
MABARNSTABLE TOWN, MA (MSA) BARNSTABLE477,355577,237701,316809,211
PITTSFIELD, MA (MSA)BERKSHIRE269,125337,168407,558506,495
PROVIDENCE-NEW
BEDFORD-FALL RIVER, RI-MA
(MSA)BRISTOL416,250472,891571,567710,309
NON-METRODUKES477,355611,117738,699918,021
ESSEX COUNTY, MA
METROPOLITAN DIVISIONESSEX477,355606,728737,146850,554
SPRIN
GFIELD, MA (MSA)
FRANK
LIN
273,5
00
337,1
68
407,5
58
506,4
95
SPRINGFIELD, MA (MSA)HAMPDEN273,500337,168407,558506,495
SPRINGFIELD, MA (MSA)HAMPSHIRE273,500337,168407,558506,495
CAMBRIDGE-NEWTON-
FRAMINGHAM, MA
METROPOLITAN DIVISIONMIDDLESEX477,355606,728737,146850,554
NON-METRONANTUCKET477,355611,117738,699918,021
BOSTON-QUINCY, MA
METROPOLITAN DIVISIONNORFOLK477,355606,728737,146850,554
BOSTON-QUINCY, MA
METROPOLITAN DIVISIONPLYMOUTH477,355606,728737,146850,554
BOSTON-QUINCY, MA
METROPOLITAN DIVISIONSUFFOLK477,355606,728737,146850,554
WO
RCESTER, MA (MSA)
WO
RCESTER
38
5,000
48
8,975
59
1,028
73
4,521
March 10, 20085592008–10 I.R.B.

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
MDBALTIMORE-TOWSON, MD
(MSA)
ANNE ARUNDEL477,355537,653653,222753,718
BALTIMORE-TOWSON, MD
(MSA)BALTIMORE477,355537,653653,222753,718
BALTIMORE-TOWSON, MD
(MSA)BALTIMORE CITY477,355537,653653,222753,718
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METROCALVERT477,355611,117738,699888,158
BALTIMORE-T
OWSON, MD
(MSA)CARROLL477,355537,653653,222753,718
WILMINGTON, DE-MD-NJ
METROPOLITAN DIVISIONCECIL385,112433,758526,996608,072
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METROCHARLES477,355611,117738,699888,158
BETHESDA-GAITHERSBURG-
FREDERICK, MD METROFREDERICK477,355611,117738,699888,158
NON-METROGARRETT437,500492,763598,684690,789
BALTIMORE-TOWSON, MD
(MSA)HARFORD477,355537,653653,222753,718
BALTIMORE
-TOWSON, MD
(MSA)HOWARD477,355537,653653,222753,718
NON-METROKENT327,089368,405447,596516,457
BETHESDA-GAITHERSBURG-
FREDERICK, MD METROMONTGOMERY477,355611,117738,699888,158
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METROPRINCE GEORGE’S 477,355611,117738,699888,158
BALTIMO
RE-TOWSON, MD
(MSA)QUEEN AN
NE’S
477,355537,653653,222753,718
SALISBURY, MD (MSA)SOMERSET328,737370,262449,851519,059
LEXINGTON PARK, MD (MICRO) ST. MARY’S381,250429,408521,711601,974
EASTON, MD (MICRO)TALBOT371,250418,145508,026599,342
HAGERS
TOWN-MARTINSBURG,
MD-WV (
MSA)
WASHIN
GTON
377,50
0
425,18
4
516,57
9
596,05
3
SALISBURY, MD (MSA)WICOMICO328,737370,262449,851519,059
OCEAN PINES, MD (MICRO)WORCESTER437,499492,761598,682690,787
MEPORTLAND-SOUTH
PORTLAND-BIDDEFORD,
ME (MSA)
CUMB
ERLAND
336,
875
379,
428
460,
987
531,
908
NON-METROHANCOCK272,500337,168407,558506,495
NON-METROLINCOLN317,625357,746434,645506,495
PORTLAND-SOUTH
PORTLAND-BIDDEFORD,
ME (MSA)SAGADAHOC336,875379,428460,987531,908
POR
TLAND-SOUTH
POR
TLAND-BIDDEFORD,
ME
(MSA)
YO
RK
33
6,875
37
9,428
46
0,987
53
1,908
MINILES-BENTON HARBOR, MI
(MSA)
BERRIEN
298,750
337,168408,816
506,495
KALAMAZOO-PORTAGE, MI
(MSA)KALAMAZOO285,625337,168407,558506,495
2008–10 I.R.B.560March 10, 2008

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
WARREN-TROY-F
ARMINGTON
HILLS, MI METRO
POLITAN
LAPEER297,500337,168407,558506,495
ADRIAN, MI (MICRO)LENAWEE297,500337,168407,558506,495
WARREN-TROY-FARMINGTON
HILLS, MI METROPOLITANLIVINGSTON297,500337,168407,558506,495
WARREN-TROY-FARMINGTON
HILLS, MI METROPOLITANMACOMB297,500337,168407,558506,495
MONROE, MI (MSA)MONROE297,500337,168407,558506,495
WARREN-TROY-FARMINGTON
HILLS, MI METROPOLITANOAKLAND297,500337,168407,558506,495
WARREN-TROY-FARMINGTON
HILLS, MI METROPOLITANST. CLAIR297,500337,168407,558506,495
KALAMAZOO-PORTAGE, MI
(MSA)VAN BUREN285,625337,168407,558506,495
ANN ARBOR, M
I(MSA)
WASHTENAW344,875388,438471,934544,539
DETROIT-LIVONIA-DEARBORN,
MI METROPOLITAN DIVISIONWAYNE297,500337,168407,558506,495
MNMINNEAPOLIS-ST.
PAUL-BLOOMINGTON, MN-WI
(MSA)
ANOKA364,057410,042498,183574,826
MINNEAPO
LIS-ST.
PAUL-BLO
OMINGTON, MN-WI
(MSA)CARVER364,057410,042498,183574,826
MINNEAPOLIS-ST.
PAUL-BLOOMINGTON, MN-WI
(MSA)CHISAGO364,057410,042498,183574,826
MINNEAPOLIS-ST.
PAUL-BLOOMINGTON, MN-WI
(MSA)DAKOTA364,057410,042498,183574,826
MINNEAPOLIS-ST.
PAUL-BLOOMINGTON, MN-WI
(MSA)HENNEPIN364,057410,042498,183574,826
MINNEAPOLIS-ST.
PAUL-BLOOMINGTON, MN-WI
(MSA)ISANTI364,057410,042498,183574,826
MINNEAPOLIS-ST.
PAUL-BLOOMINGTON, MN-WI
(MSA)RAMSEY364,057410,042498,183574,826
MINNE
APOLIS-ST.
PAUL-
BLOOMINGTON, MN-WI
(MSA)SCOTT364,0
57
410,0
42
498,1
83
574,8
26
MINNEAPOLIS-ST.
PAUL-BLOOMINGTON, MN-WI
(MSA)SHERBURNE364,057410,042498,183574,826
MINNEAPOLIS-ST.
PAUL-BLOOMINGTON, MN-WI
(MSA)WASHINGTON364,057410,042498,183574,826
MINNEAPOLIS-ST.
PAUL-BLOOMINGTON, MN-WI
(MSA)WRIGHT364,057410,042498,183574,826
MOKANSAS CITY, MO-KS (MSA)BATES268,750337,168407,558506,495
KA
NSAS CITY, MO-KS (MSA)
CA
LDWELL
26
8,750
33
7,168
40
7,558
50
6,495
KANSAS CITY, MO-KS (MSA)CASS268,750337,168407,558506,495
KANSAS CITY, MO-KS (MSA)CLAY268,750337,168407,558506,495
March 10, 20085612008–10 I.R.B.

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
KANSAS CITY, MO-KS (MSA)CLINTON268,750337,168407,558506,495
ST. LOUIS, MO-IL (MSA)CRAWFORD281,250337,168407,558506,495
ST. LOUIS, MO-
IL (MSA)
FRANKLIN281,250337,168407,558506,495
KANSAS CITY, MO-KS (MSA)JACKSON268,750337,168407,558506,495
ST. LOUIS, MO-IL (MSA)JEFFERSON281,250337,168407,558506,495
KANSAS CITY, MO-KS (MSA)LAFAYETTE268,750337,168407,558506,495
ST. LOUIS, MO-IL (MSA)LINCOLN281,250337,168407,558506,495
KANSAS CITY, MO-KS (MSA)PLATTE268,750337,168407,558506,495
KANSAS CIT
Y, MO-KS (MSA)
RAY268,750337,168407,558506,495
ST. LOUIS, MO-IL (MSA)ST. CHARLES281,250337,168407,558506,495
ST. LOUIS, MO-IL (MSA)ST. LOUIS281,250337,168407,558506,495
ST. LOUIS, MO-IL (MSA)ST. LOUIS CITY281,250337,168407,558506,495
ST. LOUIS, MO-IL (MSA)WARREN281,250337,168407,558506,495
ST. LOUIS, MO-IL (MSA)WASHINGTON281,250337,168407,558506,495
MTKALISPELL, MT (MICRO)FLATHEAD299,875337,754410,355506,495
BOZEMAN, MT (MICRO)GALLATIN331,250373,092453,289523,026
MISSOULA, MT (MSA)MISSOULA290,625337,168407,558506,495
NCCHARLOTTE-GASTONIA-
CONCORD, NC-SC (MSA)
ANSON303,250341,555414,974506,495
WILMI
NGTON, NC (MSA)
BRUNS
WICK
303,1
25
341,4
14
414,8
03
506,4
95
ASHEVILLE, NC (MSA)BUNCOMBE303,125341,414414,803506,495
CHARLOTTE-GASTONIA-
CONCORD, NC-SC (MSA)CABARRUS303,250341,555414,974506,495
MOREHEAD CITY, NC (MICRO) CARTERET287,500337,168407,558506,495
DUR
HAM, NC (MSA)
CHA
THAM
312
,500
351
,974
427
,632
506
,495
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VA-NC (MSA) CURRITUCK412,500464,605564,474651,316
KILL DEVIL HILLS, NC (MICRO) DARE460,000518,105629,474726,316
DURHAM, NC (MSA)DURHAM312,500351,974427,632506,495
RA
LEIGH-CARY, NC (MSA)
FR
ANKLIN
29
5,000
33
7,168
40
7,558
50
6,495
CHARLOTTE-GASTONIA-
CONCORD, NC-SC (MSA)GASTON303,250341,555414,974506,495
ASHEVILLE, NC (MSA)HAYWOOD303,125341,414414,803506,495
ASHEVILLE, NC (MSA)HENDERSON303,125341,414414,803506,495
R
ALEIGH-CARY, NC (MSA)
J
OHNSTON
2
95,000
3
37,168
4
07,558
5
06,495
ASHEVILLE, NC (MSA)MADISON303,125341,414414,803506,495
CHARLOTTE-GASTONIA-
CONCORD, NC-SC (MSA)MECKLENBURG303,250341,555414,974506,495
WILMINGTON, NC (MSA)NEW HANOVER303,125341,414414,803506,495
JACKSONVILLE, NC (MSA)ONSLOW306,250344,934419,079506,495
DURHAM, NC (MSA)ORANGE312,500351,974427,632506,495
WILMINGTON, NC (MSA)PENDER303,125341,414414,803506,495
DURHAM, NC (MSA)PERSON312,500351,974427,632506,495
CHARLOTTE-GASTONIA-
CONCORD, NC-SC (MSA)UNION303,250341,555414,974506,495
RALEIGH-CARY, NC (MSA)WAKE295,000337,168407,558506,495
NHMANCHESTER-NASHUA, NH
(MSA)
HILLSBOROUGH
401,875488,975591,028734,521
CONCORD, NH (MICRO)MERRIMACK277,500337,168407,558506,495
2008–10 I.R.B.562March 10, 2008

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
ROCKINGHAM COUNTY-
STRAFFORD COUNTY, NH
METROPOLITANROCKINGHAM477,355606,728737,146850,554
ROCKINGHAM COUNTY-
STRAFFORD COUNTY, NH
METROPOLITANSTRAFFORD477,355606,728737,146850,554
NJATLANTIC CITY, NJ (MSA)ATLANTIC453,750511,066620,921716,447
NEW YORK-WHI
TE
PLAINS-WAYN
E, NY-NJ METRO
BERGEN477,355611,117738,699918,021
CAMDEN, NJ METROPOLITAN
DIVISIONBURLINGTON385,112433,758526,996608,072
CAMDEN, NJ M
ETROPOLITAN
DIVISIONCAMDEN385,112433,758526,996608,072
OCEAN CITY, NJ (MSA)CAPE MAY477,355558,934679,079783,553
VINELAND-MILLVILLE-
BRIDGETON, NJ (MSA)CUMBERLAND405,000456,158554,211639,474
NEWARK-UNION, NJ-PA
METROPOLITAN DIVISIONESSEX477,355611,117738,699918,021
CAMDEN, NJ METROPOLITAN
DIVISIONGLOUCESTER385,112433,758526,996608,072
NEW YORK-WHITE
PLAINS-WAYNE, NY-NJ METRO HUDSON477,355611,117738,699918,021
NEWARK-UNION, NJ-PA
METROPOLITAN DIVISIONHUNTERDON477,355611,117738,699918,021
TRENTON-EWING, NJ (MSA)MERCER439,550495,071601,489694,026
EDISON, NJ METROPOLITAN
DIVISIONMIDDLESEX477,355611,117738,699918,021
EDISON, NJ METROPOLITAN
DIVISIONMONMOUTH477,355611,117738,699918,021
NEWARK-UNION, NJ-PA
METROPOLITAN DIVISIONMORRIS477,355611,117738,699918,021
EDISON, NJ METROPOLITAN
DIVISIONOCEAN477,355611,117738,699918,021
NEW YORK-WHITE
PLAINS-WAYNE, NY-NJ METRO PASSAIC477,355611,117738,699918,021
WILMINGTON, DE-MD-NJ
METROPOLITAN DIVISIONSALEM385,112433,758526,996608,072
EDISON, NJ METROPOLITAN
DIVISIONSOMERSET477,355611,117738,699918,021
NEWARK-UNION, NJ-PA
METROPOLITAN DIVISIONSUSSEX477,355611,117738,699918,021
NEWARK-UNION, NJ-PA
METROPOLITAN DIVISIONUNION477,355611,117738,699918,021
ALLENTOWN-BETHLEHEM-
EASTON, PA-NJ (MSA)WARREN402,192459,255557,974643,816
NMLOS ALAMOS, NM (MICRO)LOS ALAMOS318,750359,013436,184506,495
FARMINGTON, NM (MSA)SAN JUAN281,250337,168407,558506,495
SANTA FE, NM (MSA)SANTA FE426,432480,296583,538673,313
NVCARSON CITY, NV (MSA)CARSON CITY398,750449,118545,658629,605
LAS VEGAS-PARADISE, NV
(MSA)CLARK400,000450,526547,368631,579
GARDNERVILLE RANCHOS, NV
(MICRO)DOUGLAS477,355582,829708,158817,105
March 10, 20085632008–10 I.R.B.

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
ELKO, NV (MICRO)ELKO325,000366,053444,737513,158
ELKO, NV (MICRO)EUREKA325,000366,053444,737513,158
FERNLEY, NV (M
ICRO)
LYON331,250373,092453,289523,026
PAHRUMP, NV (MICRO)NYE325,000366,053444,737513,158
RENO-SPARKS, NV (MSA)STOREY477,355537,653653,222753,718
RENO-SPARKS, NV (MSA)WASHOE477,355537,653653,222753,718
NYALBANY-SCHENECTADY-
TROY, NY (MSA)
ALBANY312,375351,833427,461506,495
NEW YORK-WHITE
PLAINS-WAYNE, NY-NJ METRO BRONX477,355611,117738,699918,021
POUGHKEEPSIE-NEWBURGH-
MIDDLETOWN, NY (MSA)DUTCHESS443,750499,803607,237700,658
BUFFALO-NIAGARA FALLS, NY
(MSA)ERIE275,075337,168407,558506,495
NEW YORK-WHITE
PLAINS-WAYNE, NY-NJ METRO KINGS477,355611,117738,699918,021
ROCHESTE
R, NY (MSA)
LIVINGST
ON
268,750337,168407,558506,495
SYRACUSE, NY (MSA)MADISON281,250337,168407,558506,495
ROCHESTER, NY (MSA)MONROE268,750337,168407,558506,495
NASSAU-SUFFOLK, NY
METROPOLITAN DIVISIONNASSAU477,355611,117738,699918,021
NEW YORK-WHITE
PLAINS-WAYNE, NY-NJ METRO NEW YORK477,355611,117738,699918,021
BUFFALO-NIAGARA FALLS, NY
(MSA)NIAGARA275,075337,168407,558506,495
SYRACU
SE, NY (MSA)
ONONDA
GA
281,25
0
337,16
8
407,55
8
506,49
5
ROCHESTER, NY (MSA)ONTARIO268,750337,168407,558506,495
POUGHKEEPSIE-NEWBURGH-
MIDDLETOWN, NY (MSA)ORANGE443,750499,803607,237700,658
ROCHESTER, NY (MSA)ORLEANS268,750337,168407,558506,495
SYRAC
USE, NY (MSA)
OSWEG
O
281,2
50
337,1
68
407,5
58
506,4
95
NEW YORK-WHITE
PLAINS-WAYNE, NY-NJ METRO PUTNAM477,355611,117738,699918,021
NEW Y
ORK-WHITE
PLAI
NS-WAYNE, NY-NJ METRO
QUEE
NS
477,
355
611,
117
738,
699
918,
021
ALBANY-SCHENECTADY-
TROY, NY (MSA)RENSSELAER312,375351,833427,461506,495
NEW Y
ORK-WHITE
PLAI
NS-WAYNE, NY-NJ METRO
RICH
MOND
477,
355
611,
117
738,
699
918,
021
NEW YORK-WHITE
PLAINS-WAYNE, NY-NJ METRO ROCKLAND477,355611,117738,699918,021
ALB
ANY-SCHENECTADY-
TRO
Y, NY (MSA)
SAR
ATOGA
312
,375
351
,833
427
,461
506
,495
ALBANY-SCHENECTADY-
TROY, NY (MSA)SCHENECTADY312,375351,833427,461506,495
ALB
ANY-SCHENECTADY-
TRO
Y, NY (MSA)
SCH
OHARIE
312
,375
351
,833
427
,461
506
,495
NASSAU-SUFFOLK, NY
METROPOLITAN DIVISIONSUFFOLK477,355611,117738,699918,021
KINGSTON, NY (MSA)ULSTER406,250457,566555,921641,447
ROCHESTER, NY (MSA)WAYNE268,750337,168407,558506,495
NEW YORK-WHITE
PLAINS-WAYNE, NY-NJ METRO WESTCHESTER477,355611,117738,699918,021
2008–10 I.R.B.564March 10, 2008

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
OHASHTABULA, OH (MICRO)ASHTABULA290,797337,168407,558506,495
CINCINNATI-MIDDLETOWN,
OH-KY-IN (MSA)BROWN337,500380,132461,842532,895
CINCINNATI-MIDDLETOWN,
OH-KY-IN (MSA)BUTLER337,500380,132461,842532,895
CANTON-MASSILLON, OH
(MSA)CARROLL277,500337,168407,558506,495
CINCINNATI-MIDDLETOWN,
OH-KY-IN (MSA)CLERMONT337,500380,132461,842532,895
CLEVELAND-ELYRIA-MENTOR,
OH (MSA)CUYAHOGA297,550337,168407,558506,495
COLUMBUS, OH (MSA)DELAWARE307,500346,342420,789506,495
COLUMBUS, OH (MSA)FAIRFIELD307,500346,342420,789506,495
COLUMBUS, OH (MSA)FRANKLIN307,500346,342420,789506,495
CLEVELAND-ELYRIA-MENTOR,
OH (MSA)GEAUGA297,550337,168407,558506,495
DAYTON, OH (MSA)GREENE271,250337,168407,558506,495
CINCINNATI-MIDDLETOWN,
OH-KY-IN (MSA)HAMILTON337,500380,132461,842532,895
CLEVELAND-ELYRIA-MENTOR,
OH (MSA)LAKE297,550337,168407,558506,495
COLUMBUS, OH (MSA)LICKING307,500346,342420,789506,495
CLEVELAN
D-ELYRIA-MENTOR,
OH (MSA)LORAIN297,550337,168407,558506,495
COLUMBUS, OH (MSA)MADISON307,500346,342420,789506,495
CLEVELAND-ELYRIA-MENTOR,
OH (MSA)MEDINA297,550337,168407,558506,495
DAYTON, OH (MSA)MIAMI271,250337,168407,558506,495
DAYTON
,OH(MSA)
MONTGO
MERY
271,25
0
337,16
8
407,55
8
506,49
5
COLUMBUS, OH (MSA)MORROW307,500346,342420,789506,495
COLUMBUS, OH (MSA)PICKAWAY307,500346,342420,789506,495
AKRON, OH (MSA)PORTAGE330,000371,684451,579521,053
DAYTON, OH (MSA)PREBLE271,250337,168407,558506,495
CANTON-MASSILLON, OH
(MSA)STARK277,500337,168407,558506,495
AKRON, OH (MSA)SUMMIT330,000371,684451,579521,053
COLUMBUS, OH (MSA)UNION307,500346,342420,789506,495
CINC
INNATI-MIDDLETOWN,
OH-K
Y-IN (MSA)
WARR
EN
337,
500
380,
132
461,
842
532,
895
ORCORVALLIS, OR (MSA)BENTON331,842373,758454,099523,961
PORTLAND-VANCOUVER-
BEAVERTON, OR-WA (MSA)CLACKAMAS401,250451,934549,079633,553
AS
TORIA, OR (MICRO)
CL
ATSOP
34
6,842
39
0,658
47
4,671
54
7,697
PORTLAND-VANCOUVER-
BEAVERTON, OR-WA (MSA)COLUMBIA401,250451,934549,079633,553
BEND, OR (MSA)DESCHUTES447,500504,026612,368706,579
HOOD RIVER, OR (MICRO)HOOD RIVER393,750443,487538,816621,711
M
EDFORD, OR (MSA)
J
ACKSON
4
22,500
4
75,868
5
78,158
6
67,105
GRANTS PASS, OR (MICRO)JOSEPHINE324,868365,904444,557512,961
EUGENE-SPRINGFIELD, OR
(MSA)LANE343,209386,562469,655541,911
NON-METROLINCOLN312,368351,825427,451506,495
SALEM, OR (MSA)MARION294,250337,168407,558506,495
March 10, 20085652008–10 I.R.B.

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
PORTLAND-VANC
OUVER-
BEAVERTON, OR-
WA (MSA)
MULTNOMAH401,250451,934549,079633,553
SALEM, OR (MSA)POLK294,250337,168407,558506,495
NON-METROTILLAMOOK343,750387,171470,395542,763
PORTLAND-VANCOUVER-
BEAVERTON, OR-WA (MSA)WASHINGTON401,250451,934549,079633,553
PORTLAND-VANCOUVER-
BEAVERTON, OR-WA (MSA)YAMHILL401,250451,934549,079633,553
PAPITTSBURGH, PA (MSA)ALLEGHENY327,500368,868448,158517,105
PITTSBURGH, PA (MSA)ARMSTRONG327,500368,868448,158517,105
PITTSBURGH
,PA(MSA)
BEAVER327,500368,868448,158517,105
READING, PA (MSA)BERKS300,000337,895410,526506,495
PHILADELPHIA, PA
METROPOLITAN DIVISIONBUCKS385,112433,758526,996608,072
PITTSBURGH, PA (MSA)BUTLER327,500368,868448,158517,105
ALLENTOWN-BETHLEHEM-
EASTON, PA-NJ (MSA)CARBON402,192459,255557,974643,816
STATE COLLEGE, PA (MSA)CENTRE279,375337,168407,558506,495
PHILADEL
PHIA, PA
METROPO
LITAN DIVISION
CHESTER385,112433,758526,996608,072
PHILADELPHIA, PA
METROPOLITAN DIVISIONDELAWARE385,112433,758526,996608,072
PITTSBURGH, PA (MSA)FAYETTE327,500368,868448,158517,105
LANCASTER, PA (MSA)LANCASTER383,250431,661524,447605,132
ALLENTOWN-BETHLEHEM-
EASTON, PA-NJ (MSA)LEHIGH402,192459,255557,974643,816
PHILADELPHIA, PA
METROPOLITAN DIVISIONMONTGOMERY385,112433,758526,996608,072
ALLENTOWN-BETHLEHEM-
EASTON, PA-NJ (MSA)NORTHAMPTON402,192459,255557,974643,816
PHILADELPHIA, PA
METROPOLITAN DIVISIONPHILADELPHIA385,112433,758526,996608,072
NEWARK-UNION, NJ-PA
METROPOLITAN DIVISIONPIKE477,355611,117738,699918,021
PITTSBURGH, PA (MSA)WASHINGTON327,500368,868448,158517,105
PITTSBURGH, PA (MSA)WESTMORELAND327,500368,868448,158517,105
YORK-HANOVER, PA (MSA)YORK424,587478,218581,014670,401
PRSAN J
UAN-CAGUAS-
GUAY
NABO, PR (MSA)
AGUAS BUENAS325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)AIBONITO325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)ARECIBO325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)BARCELONETA325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)BARRANQUITAS325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)BAYAMON325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)CAGUAS325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)CAMUY325,000366,053444,737513,158
2008–10 I.R.B.566March 10, 2008

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
SAN JUAN-CAGUA
S-
GUAYNABO, PR (M
SA)
CANOVANAS325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)CAROLINA325,000366,053444,737513,158
SAN JUAN-CAGU
AS-
GUAYNABO, PR (
MSA)
CATANO325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)CAYEY325,000366,053444,737513,158
FAJARDO, PR (MSA)CEIBA325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)CIALES325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)CIDRA325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)COMERIO325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)COROZAL325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)DORADO325,000366,053444,737513,158
FAJARDO, PR (MSA)FAJARDO325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)FLORIDA325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)GUAYNABO325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)GURABO325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)HATILLO325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)HUMACAO325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)JUNCOS325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)LAS PIEDRAS325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)LOIZA325,000366,053444,737513,158
FAJARDO, PR (MSA)LUQUILLO325,000366,053444,737513,158
SAN JUA
N-CAGUAS-
GUAYNA
BO, PR (MSA)
MANATI325,00
0
366,05
3
444,73
7
513,15
8
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)MAUNABO325,000366,053444,737513,158
SAN JUA
N-CAGUAS-
GUAYNA
BO, PR (MSA)
MOROVI
S
325,00
0
366,05
3
444,73
7
513,15
8
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)NAGUABO325,000366,053444,737513,158
SAN JU
AN-CAGUAS-
GUAYN
ABO, PR (MSA)
NARAN
JITO
325,0
00
366,0
53
444,7
37
513,1
58
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)OROCOVIS325,000366,053444,737513,158
SAN JU
AN-CAGUAS-
GUAYN
ABO, PR (MSA)
QUEBR
ADILLAS
325,0
00
366,0
53
444,7
37
513,1
58
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)RIO GRANDE325,000366,053444,737513,158
SAN J
UAN-CAGUAS-
GUAY
NABO, PR (MSA)
SAN J
UAN
325,
000
366,
053
444,
737
513,
158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)SAN LORENZO325,000366,053444,737513,158
March 10, 20085672008–10 I.R.B.

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
SAN JUAN-CAGUA
S-
GUAYNABO, PR (M
SA)
TOA ALTA325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)TOA BAJA325,000366,053444,737513,158
SAN JUAN-CAGU
AS-
GUAYNABO, PR (
MSA)
TRUJILLO ALTO325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)VEGA ALTA325,000366,053444,737513,158
SAN JUAN-CAGU
AS-
GUAYNABO, PR
(MSA)
VEGA BAJA325,000366,053444,737513,158
SAN JUAN-CAGUAS-
GUAYNABO, PR (MSA)YABUCOA325,000366,053444,737513,158
RIPROVIDENCE-NEW
BEDFORD-FALL RIVER, RI-MA
(MSA)
BRISTOL416,250472,891571,567710,309
PROVIDENCE
-NEW
BEDFORD-FA
LL RIVER, RI-MA
(MSA)KENT416,250472,891571,567710,309
PROVIDENCE-NEW
BEDFORD-FALL RIVER, RI-MA
(MSA)NEWPORT416,250472,891571,567710,309
PROVIDENCE-NEW
BEDFORD-FALL RIVER, RI-MA
(MSA)PROVIDENCE416,250472,891571,567710,309
PROVIDENCE-NEW
BEDFORD-FALL RIVER, RI-MA
(MSA)WASHINGTON416,250472,891571,567710,309
SCHILTON HEAD ISLAND-
BEAUFORT, SC (MICRO)
BEAUFORT373,750420,961511,447590,132
CHARLESTON-NORTH
CHARLESTON, SC (MSA)BERKELEY334,375376,612457,566527,961
CHARLESTON-NORTH
CHARLESTON, SC (MSA)CHARLESTON334,375376,612457,566527,961
CHARLESTON-NORTH
CHARLESTON, SC (MSA)DORCHESTER334,375376,612457,566527,961
GREENVILLE, SC (MSA)GREENVILLE294,541337,168407,558506,495
MYRTLE BEACH-CONWAY-
NORTH MYRTLE BEACH, SC
(MSA)HORRY286,250337,168407,558506,495
HILTON HEAD ISLAND-
BEAUFORT, SC (MICRO)JASPER373,750420,961511,447590,132
GREEN
VILLE, SC (MSA)
LAURE
NS
294,5
41
337,1
68
407,5
58
506,4
95
GREENVILLE, SC (MSA)PICKENS294,541337,168407,558506,495
CHARLOTTE-GASTONIA-
CONCORD, NC-SC (MSA)YORK303,250341,555414,974506,495
TNNASHVILLE-DAVID-
SON—MURFREESBORO, TN
(MSA)
CANNON297,500337,168407,558506,495
NASHVILLE-DAVID-
SON—MURFREESBORO, TN
(MSA)CHEATHAM297,500337,168407,558506,495
2008–10 I.R.B.568March 10, 2008

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
NASHVILLE-DAVID-
SON—MURFREESBORO, TN
(MSA)DAVIDSON297,500337,168407,558506,495
NASHVILLE-DAVID-
SON—MURFREESBORO, TN
(MSA)DICKSON297,500337,168407,558506,495
NASHVILLE-DA
VID-
SON—MURFREE
SBORO, TN
(MSA)HICKMAN297,500337,168407,558506,495
NASHVILLE-DAVID-
SON—MURFREESBORO, TN
(MSA)MACON297,500337,168407,558506,495
NASHVILLE-DAVID-
SON—MURFREESBORO, TN
(MSA)ROBERTSON297,500337,168407,558506,495
NASHVILLE-DAVID-
SON—MURFREESBORO, TN
(MSA)RUTHERFORD297,500337,168407,558506,495
NASHVILLE-DAVID-
SON—MURFREESBORO, TN
(MSA)SMITH297,500337,168407,558506,495
NASHVILLE-DAVID-
SON—MURFREESBORO, TN
(MSA)SUMNER297,500337,168407,558506,495
NASHVILL
E-DAVID-
SON—MURF
REESBORO, TN
(MSA)TROUSDAL
E
297,500337,168407,558506,495
NASHVILLE-DAVID-
SON—MURFREESBORO, TN
(MSA)WILLIAMSON297,500337,168407,558506,495
NASHVILLE-DAVID-
SON—MURFREESBORO, TN
(MSA)WILSON297,500337,168407,558506,495
UTOGDEN-
CLEARFIELD, UT (MSA)
DAVIS346,56
3
390,33
9
474,24
3
547,20
4
PROVO-OREM, UT (MSA)JUAB305,664344,275418,279506,495
NON-METROKANE383,064431,453524,193604,839
OGDEN-CLEARFIELD, UT (MSA) MORGAN346,563390,339474,243547,204
SALT LAKE CITY, UT (MSA)SALT LAKE477,355611,117738,699863,487
SALT LAKE CITY, UT (MSA)SUMMIT477,355611,117738,699863,487
SALT
LAKE CITY, UT (MSA)
TOOE
LE
477,
355
611,
117
738,
699
863,
487
PROVO-OREM, UT (MSA)UTAH305,664344,275418,279506,495
ST. GEORGE, UT (MSA)WASHINGTON372,500419,553509,737588,158
OGDEN-CLEARFIELD, UT (MSA) WEBER346,563390,339474,243547,204
VACHARLOTTESVILLE, VA (MSA) ALBEMARLE425,000478,684581,579671,053
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METROALEXANDRIA477,355611,117738,699888,158
RICHMOND, VA (MSA)AMELIA347,500391,395475,526548,684
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METROARLINGTON477,355611,117738,699888,158
RICHMOND, VA (MSA)CAROLINE347,500391,395475,526548,684
RICHMOND, VA (MSA)CHARLES CITY347,500391,395475,526548,684
March 10, 20085692008–10 I.R.B.

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
CHARLOTTESVILLE, VA (MSA) CHARLOTTESVILLE 425,000478,684581,579671,053
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VA-NC (MSA) CHESAPEAKE412,500464,605564,474651,316
RICHMOND, VA (MSA)CHESTERFIELD347,500391,395475,526548,684
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METROCLARKE477,355611,117738,699888,158
RICHMOND, VA (MSA)COLONIAL HEIGHT 347,500391,395475,526548,684
CULPEPER, VA (MICRO)CULPEPER381,999448,442544,837628,658
RICHMOND, VA (MSA)CUMBERLAND347,500391,395475,526548,684
RICHMOND, VA (MSA)DINWIDDIE347,500391,395475,526548,684
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METROFAIRFAX477,355611,117738,699888,158
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METROFAIRFAX IND477,355611,117738,699888,158
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METROFALLS CHURCH477,355611,117738,699888,158
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METROFAUQUIER477,355611,117738,699888,158
CHARLOTTESVILLE, VA (MSA) FLUVANNA425,000478,684581,579671,053
WINCHESTER, VA-WV (MSA)FREDERICK475,000535,000650,000750,000
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METROFREDERICKSBURG 477,355611,117738,699888,158
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VA-NC (MSA) GLOUCESTER412,500464,605564,474651,316
RICHM
OND, VA (MSA)
GOOCH
LAND
347,5
00
391,3
95
475,5
26
548,6
84
CHARLOTTESVILLE, VA (MSA) GREENE425,000478,684581,579671,053
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VA-NC (MSA) HAMPTON412,500464,605564,474651,316
RICHMOND, VA (MSA)HANOVER347,500391,395475,526548,684
RICH
MOND, VA (MSA)
HENR
ICO
347,
500
391,
395
475,
526
548,
684
RICHMOND, VA (MSA)HOPEWELL347,500391,395475,526548,684
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VA-NC (MSA) ISLE OF WIGHT412,500464,605564,474651,316
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VA-NC (MSA) JAMES CITY412,500464,605564,474651,316
RICHMOND, VA (MSA)KING AND QUEEN347,500391,395475,526548,684
NON-METROKING GEORGE381,999448,442544,837628,658
RICHMOND, VA (MSA)KING WILLIAM347,500391,395475,526548,684
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METROLOUDOUN477,355611,117738,699888,158
RICHMOND, VA (MSA)LOUISA347,500391,395475,526548,684
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METROMANASSAS477,355611,117738,699888,158
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METROMANASSAS PARK477,355611,117738,699888,158
2008–10 I.R.B.570March 10, 2008

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
VIRGINIA BEACH
-NORFOLK-
NEWPORT NEWS, V
A-NC (MSA)
MATHEWS412,500464,605564,474651,316
CHARLOTTESVILLE, VA (MSA) NELSON425,000478,684581,579671,053
RICHMOND, VA (MSA)NEW KENT347,500391,395475,526548,684
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VA-NC (MSA) NEWPORT NEWS412,500464,605564,474651,316
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VA-NC (MSA) NORFOLK412,500464,605564,474651,316
RICHMOND, VA (MSA)PETERSBURG347,500391,395475,526548,684
VIRGINIA BEA
CH-NORFOLK-
NEWPORT NEWS
, VA-NC (MSA)
POQUOSON412,500464,605564,474651,316
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VA-NC (MSA) PORTSMOUTH412,500464,605564,474651,316
RICHMOND, VA (MSA)POWHATAN347,500391,395475,526548,684
RICHMOND, VA (MSA)PRINCE GEORGE347,500391,395475,526548,684
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METROPRINCE WILLIAM477,355611,117738,699888,158
RICHMOND, VA (MSA)RICHMOND IND347,500391,395475,526548,684
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METROSPOTSYLVANIA477,355611,117738,699888,158
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METROSTAFFORD477,355611,117738,699888,158
VIRGINI
A BEACH-NORFOLK-
NEWPORT
NEWS, VA-NC (MSA)
SUFFOLK412,500464,605564,474651,316
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VA-NC (MSA) SURRY412,500464,605564,474651,316
RICHMOND, VA (MSA)SUSSEX347,500391,395475,526548,684
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VA-NC (MSA) VIRGINIA BEACH412,500464,605564,474651,316
WASHIN
GTON-ARLINGTON-
ALEXAN
DRIA, DC-VA-MD-WV
METROWARREN477,35
5
611,11
7
738,69
9
888,15
8
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VA-NC (MSA) WILLIAMSBURG412,500464,605564,474651,316
WINCHESTER, VA-WV (MSA)WINCHESTER475,000535,000650,000750,000
VIRGINIA BEACH-NORFOLK-
NEWPORT NEWS, VA-NC (MSA) YORK412,500464,605564,474651,316
VI
NON-METROST. CROIX287,500337,168407,558506,495
NON-METROST. THOMAS318,750359,013436,184506,495
VTBURLINGTON-SOUTH
BURLINGTON, VT (MSA)
CHI
TTENDEN
318
,750
359
,013
436
,184
506
,495
BURLINGTON-SOUTH
BURLINGTON, VT (MSA)FRANKLIN318,750359,013436,184506,495
BUR
LINGTON-SOUTH
BU
RLINGTON, VT (MSA)
GR
AND ISLE
31
8,750
35
9,013
43
6,184
50
6,495
WAKENNEWICK-RICHLAND-
PASCO, WA (MSA)
BENTON274,875337,168407,558506,495
WENATCHEE, WA (MSA)CHELAN323,092363,903442,125510,145
PORT ANGELES, WA (MICRO)CLALLAM296,250337,168407,558506,495
March 10, 20085712008–10 I.R.B.

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
PORTLAND-VANC
OUVER-
BEAVERTON, OR-
WA (MSA)
CLARK401,250451,934549,079633,553
WENATCHEE, WA (MSA)DOUGLAS323,092363,903442,125510,145
KENNEWICK-RICHLAND-
PASCO, WA (MSA)FRANKLIN274,875337,168407,558506,495
OAK HARBOR, WA (MICRO)ISLAND381,250429,408521,711601,974
NON-METROJEFFERSON437,500492,763598,684690,789
SEATTLE-BELLEVUE-EVERETT,
WA METROPOLITAN DIVISION KING477,355573,684697,039804,276
BREMERTON-S
ILVERDALE, WA
(MSA)KITSAP475,000535,000650,000750,000
ELLENSBURG, WA (MICRO)KITTITAS328,618370,132449,688518,882
SHELTON, WA (MICRO)MASON310,000349,158424,211506,495
TACOMA, WA METROPOLITAN
DIVISIONPIERCE477,355573,684697,039804,276
NON-METROSAN JUAN477,355598,355726,974838,816
MOUNT VERNON-ANACORTES,
WA (MSA)SKAGIT373,662420,862511,328589,993
PORTLAND-
VANCOUVER-
BEAVERTO
N, OR-WA (MSA)
SKAMANIA401,250451,934549,079633,553
SEATTLE-BELLEVUE-EVERETT,
WA METROPOLITAN DIVISION SNOHOMISH477,355573,684697,039804,276
SPOKANE, WA (MSA)SPOKANE266,250337,168407,558506,495
OLYMPIA, WA (MSA)THURSTON361,250406,882494,342570,395
BELLING
HAM, WA (MSA)
WHATCOM375,000422,368513,158592,105
WIMADISON, WI (MSA)COLUMBIA293,750337,168407,558506,495
MADISON, WI (MSA)DANE293,750337,168407,558506,495
MADISON, WI (MSA)IOWA293,750337,168407,558506,495
LAKE COUNTY-KENOSHA
COUNTY, IL-WI METROPOLITAN
DIVKENOSHA362,105407,845495,512571,745
MILWA
UKEE-WAUKESHA-
WEST A
LLIS, WI (MSA)
MILWA
UKEE
288,8
75
337,1
68
407,5
58
506,4
95
MILWAUKEE-WAUKESHA-
WEST ALLIS, WI (MSA)OZAUKEE288,875337,168407,558506,495
MINNEAPOLIS-ST.
PAUL-BLOOMINGTON, MN-WI
(MSA)PIERCE364,057410,042498,183574,826
MINNEAPOLIS-ST.
PAUL-BLOOMINGTON, MN-WI
(MSA)ST. CROIX364,057410,042498,183574,826
MILWAUKEE-WAUKESHA-
WEST ALLIS, WI (MSA)WASHINGTON288,875337,168407,558506,495
MILWAUKEE-WAUKESHA-
WEST ALLIS, WI (MSA)WAUKESHA288,875337,168407,558506,495
WVHAGERSTOWN-MARTINSBURG,
MD-WV (MSA)
BERKELEY377,500425,184516,579596,053
WINCHESTER, VA-WV (MSA)HAMPSHIRE475,000535,000650,000750,000
WASHINGTON-ARLINGTON-
ALEXANDRIA, DC-VA-MD-WV
METROJEFFERSON477,355611,117738,699888,158
H
AGERSTOWN-MARTINSBURG,
M
D-WV (MSA)
M
ORGAN
3
77,500
4
25,184
5
16,579
5
96,053
2008–10 I.R.B.572March 10, 2008

STATEMSA NAMECOUNTY NAMEMRB limits
1 Unit2 Units3 Units4 Units
WYJACKSON, WY-ID (MICRO)TETON477,355611,117738,699918,021
ALL
OTHER
AREAS263,368337,168407,558506,495
.02 Th
e nationwide average purchase
price
(for use in the housing cost/income
ratio
for new and existing residences) is
$266,
000.
SECTI
ON 5. EFFECT ON OTHER
DOCU
MENTS
Rev. Proc. 2007–26 is obsolete except
as provided in section 6 of this revenue
procedure.
SECTION 6. EFFECTIVE DATES
.01 Issuers may rely on this revenue
procedure to determine average area pur-
chase price safe harbors for commitments
to provide financing or issue mortgage
credit certificates that are made, or (if
the purchase precedes the commitment)
for residences that are purchased, in the
period that begins on February 21, 2008
and ends on the date as of which the safe
harbors contained in section 4.01 of this
revenue procedure are rendered obsolete
by a new revenue procedure.
.02 Notwithstanding section 5 of this
revenue procedure, issuers may continue
to rely on the average area purchase price
safe harbors contained in Rev. Proc.
2007–26, with respect to bonds sold, or for
mortgage credit certificates issued with re-
spect to bond authority exchanged, before
March 22, 2008, if the commitments to
provide financing or issue mortgage credit
certificates are made on or before April
21, 2008.
.03 Except as provided in section 6.04,
issuers must use the nationwide average
purchase price limitation contained in
this revenue procedure for commitments
to provide financing or issue mortgage
credit certificates that are made, or (if the
purchase precedes the commitment) for
residences that are purchased, in the pe-
riod that begins on February 21, 2008, and
ends on the date when the nationwide av-
erage purchase price limitation is rendered
obsolete by a new revenue procedure.
.04 No
twithstanding sections 5 and
6.03 o
f this revenue procedure, issuers
may co
ntinue to rely on the nationwide av-
erage
purchase price set forth in Rev. Proc.
2007–
26 with respect to bonds sold, or for
mort
gage credit certificates issued with re-
spec
t to bond authority exchanged, before
Marc
h 22, 2008, if the commitments to
prov
ide financing or issue mortgage credit
cer
tificates are made on or before April
21,
2008.
SEC
TION 7. PAPERWORK
RED
UCTION ACT
The collection of information con-
tained in this revenue procedure has been
reviewed and approved by the Office
of Management and Budget in accor-
dance with the Paperwork Reduction Act
(44 U.S.C. 3507) under control number
1545–1877.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.
This revenue procedure contains a col-
lection of information requirement in sec-
tion 3.03. The purpose of the collection
of information is to verify the applica-
ble FHA loan limit that issuers of quali-
fied mortgage bonds and qualified mort-
gage certificates have used to calculate the
average area purchase price for a given
metropolitan statistical area for purposes
of section 143(e) and 25(c). The collec-
tion of information is required to obtain
the benefit of using revisions to FHA loan
limits to determine average area purchase
prices. The likely respondents are state
and local governments.
The estimated total annual reporting
and/or recordkeeping burden is: 15 hours.
The estimated annual burden per re-
spondent and/or recordkeeper: 15 minutes.
The estimated number of respondents
and/or recordkeepers: 60.
Books
or records relating to a collection
of inf
ormation must be retained as long
as the
ir contents may become material in
the ad
ministration of any internal revenue
law. G
enerally tax returns and tax return
info
rmation are confidential, as required
by 26
U.S.C. 6103.
SECTION 8. DRAFTING
INFORMATION
The principal authors of this rev-
enue procedure are David E. White
and Timothy L. Jones of the Office
of Associate Chief Counsel (Financial
Institutions & Products). For further
information regarding this revenue
procedure, contact David E. White at (202)
622–3980 (not a toll-free call).
26 CFR 1.1361: Special rule for bank required to
change from the reserve method of accounting on be-
coming an S corporation.
(Also: Sections 166, 446, 481(a), 581, and 585.)
Rev. Proc. 2008–18
SECTION 1. PURPOSE
This revenue procedure explains how a
bank that changes from the reserve method
of accounting for bad debts under § 585
of the Internal Revenue Code for its first
taxable year for which an election under
§ 1362(a) is in effect may elect under
§ 1361(g) to take into account the result-
ing § 481(a) adjustment in determining
taxable income for the immediately pre-
ceding taxable year.
SECTION 2. BACKGROUND
.01 Section 1361(a) provides that the
term “S corporation” means, with re-
spect to any taxable year, a small business
corporationforwhichanelectionunder
§ 1362(a) is in effect for such year. Sec-
tion 1361(b) provides that any corporation
March 10, 20085732008–10 I.R.B.

that is a financial institution which uses
the reserve method of accounting for bad
debts described in § 585 is not eligible to
be an S corporation.
.02 If a financial institution changes
from the § 585 reserve method of account-
ing for bad debts to the § 166 specific
charge-off method, the amount of the
§ 481(a) adjustment for the change gen-
erally is the amount of the institution’s
reserve for bad debts as of the close of the
taxable year immediately before the year
of change. This positive adjustment is
generally taken into account over four tax-
able years beginning in the year of change.
.03 Rev. Proc. 2002–9, 2002–1 C.B.
327, (as modified and amplified by Rev.
Proc. 2002–19, 2002–1 C.B. 696, as am-
plified, clarified and modified by Rev.
Proc. 2002–54, 2002–2 C.B. 432, and as
modified and clarified by Announcement
2002–17, 2002–1 C.B. 561) provides pro-
cedures by which a taxpayer may obtain
the automatic consent of the Commis-
sioner of Internal Revenue under § 446
for a change in method of accounting de-
scribed in the APPENDIX of Rev. Proc.
2002–9. Section 11.01 of that APPEN-
DIX provides rules for a bank changing its
method of accounting for bad debts from
the § 585 reserve method of accounting
to the § 166 specific charge-off method of
accounting. A taxpayer complying with
all of the applicable provisions of Rev.
Proc. 2002–9 has obtained the consent of
the Commissioner to change its method of
accounting.
.04 Section 8233(a) of the Small Busi-
ness and Work Opportunity Act of 2007
(Public Law 110–28) added § 1361(g) to
the Code. Section 1361(g) provides that,
in the case of a bank which changes from
the reserve method of accounting for bad
debts described in § 585 for its first taxable
year for which an election under § 1362(a)
is in effect, the bank may elect to take into
account any adjustments under § 481 by
reason of such change for the taxable year
immediately preceding such first taxable
year. Section 1361(g)applies to taxable
years beginning after December 31, 2006.
SECTION 3. SCOPE
.01In general. Section 11.01 of the AP-
PENDIX of Rev. Proc. 2002–9 provides
rules for a bank (as defined in § 581, in-
cluding a bank for which a qualified sub-
chapter S subsidiary (QSub) election is
filed) that wants to change its method of
accounting for bad debts from the § 585 re-
serve method to the § 166 specific charge-
off method. Section 11.01 specifically ref-
erences the requirement that a bank must
change its method of accounting for bad
debts from the § 585 reserve method in or-
der to be eligible to elect subchapter S sta-
tus.
.02Election for § 481(a) adjustment.
Section 4.01 of this revenue procedure de-
scribes the process by which a bank may
elect under § 1361(g) to take into account
the § 481(a) adjustment resulting from a
change in method of accounting for bad
debts in determining taxable income for
the taxable year immediately preceding the
year of change.
SECTION 4. APPLICATION
.01 Requirements for election to include
§ 481(a) adjustment in taxable year imme-
diately preceding the year of change.Fora
taxable year beginning after December 31,
2006, a bank that changes its method of ac-
counting for bad debts, under section 11.01
of the APPENDIX to Rev. Proc. 2002–9,
from the § 585 reserve method to the § 166
specific charge-off method for the first tax-
able year for which the S corporation elec-
tion is effective (year of change) may elect
to take into account the amount of the re-
sulting § 481(a) adjustment in determining
taxable income for the taxable year imme-
diately preceding the year of change. To
make this election, a bank must (1) file
an original and copy of Form 3115 under
section 6.02(3) of Rev. Proc. 2002–9 for
the year of change, (2) file an additional
copy of the Form 3115 with its original
(or amended) federal income tax return for
the taxable year immediately preceding the
year of change filed no later than the date
theoriginalForm3115isproperlyfiledun-
der section 6.02(3) of Rev. Proc. 2002–9,
and (3) include the amount of the § 481(a)
adjustment in gross income for the tax-
able year immediately preceding the year
of change. The original (and each copy
of) Form 3115 must state at the top of the
document, “Section 1361(g) Election Filed
Pursuant to Rev. Proc. 2008–18.”
.02Example.X, a calendar year taxpayer, is a
bank as defined in § 581 and is not a large bank as de-
fined in § 585(c)(2). For taxable years before 2007,
X accounted for its bad debts under the § 585 re-
serve method. By March 15, 2007, X properly filed
aForm2553electingtobeanScorporationeffec-
tive January 1, 2007. Pursuant to section 11.01(3)
of the APPENDIX to Rev. Proc. 2002–9, the fil-
ing of the Form 2553 constituted an agreement by
X to change from the § 585 reserve method to the
§ 166 specific charge-off method in 2007 in accor-
dance with all of the applicable provisions of Rev.
Proc. 2002–9. Thus, for example, X must file a Form
3115 for this change in duplicate, in accordance with
section 6.02(3) of Rev. Proc. 2002–9, by attaching
the original Form 3115 to X’s timely filed (includ-
ing extensions) original federal income tax return for
2007 and filing a copy of the Form 3115 with the na-
tional office. The amount of X’s § 481(a) adjustment
for the change is the amount of X’s bad debt reserve as
of the close of December 31, 2006. X wishes to elect
under § 1361(g) to include the § 481(a) adjustment
in income in the tax year ending December 31, 2006,
the taxable year immediately preceding the year of
change. To make this election, X must (1) file an orig-
inal and copy of Form 3115 under section 6.02(3) of
Rev. Proc. 2002–9 for 2007, (2) file an additional
copy of the Form 3115 with its original (or amended)
federal income tax return for 2006 filed no later than
the date the original Form 3115 is properly filed un-
der section 6.02(3) of Rev. Proc. 2002–9, and (3) in-
clude the amount of its § 481(a) adjustment in gross
income in its return for 2006. The original (and each
copy of) Form 3115 must state at the top of the doc-
ument, “Section 1361(g) Election Filed Pursuant to
Rev. Proc. 2008–18.”
SECTION 5. SPECIAL RULE FOR
CERTAIN 2006 TAXABLE YEARS
A special rule is provided for a bank
that, prior to the issuance of this revenue
procedure, changed its method of account-
ingforbaddebtsfromthe§585reserve
method to the § 166 specific charge-off
method under section 11.01 of the AP-
PENDIX of Rev. Proc. 2002–9 for a
year of change beginning after December
31, 2005, and ending before December 31,
2007 (“2006 taxable year”). This special
rule only applies if the bank elected to be
an S corporation for its first taxable year
beginning after December 31, 2006. Un-
der this special rule, the bank may elect
to take the entire § 481(a) adjustment into
account in determining taxable income for
the 2006 taxable year by attaching a copy
of its original Form 3115 with the follow-
ing language written on the top of the doc-
ument, “Special Election under Section 5
of Rev. Proc. 2008–18,” to an amended re-
turn for the 2006 taxable year that reflects
the entire § 481(a) adjustment. A copy of
the original Form 3115 with the required
language written at the top should also be
provided to the National Office (see sec-
tion 6.02(6) of Rev. Proc. 2002–9 for the
address). This special rule only applies to
2008–10 I.R.B.574March 10, 2008

an election made under this section 5 on an
amended return for the 2006 taxable year
filed on or before September 15, 2008.
SECTION 6. EFFECTIVE DATE
This revenue procedure is effective for
taxable years beginning after December
31, 2006, except as provided in Section 5
of this revenue procedure.
SECTION 7. EFFECT ON OTHER
DOCUMENTS
This revenue procedure modifies Rev.
Proc. 2002–9 by adding section 4.01(1) of
this revenue procedure to section 11.01 of
the APPENDIX of Rev. Proc. 2002–9.
See section 11.01 of the APPENDIX of
Rev. Proc. 2002–9 for the specific rules
relating to a change in accounting method
from the § 585 reserve method of account-
ing for bad debts to the § 166 specific
charge-off method of accounting.
SECTION 8. DRAFTING
INFORMATION
The principal author of this revenue
procedure is Laura C. Fields of the Office
of Associate Chief Counsel (Passthroughs
and Special Industries). For further infor-
mation regarding this revenue procedure,
contact Laura C. Fields at (202) 622–3050
(not a toll-free call).
March 10, 20085752008–10 I.R.B.

Part IV. Items o
fGeneralInterest
Notice of Prop
osed
Rulemaking by
Cross-Refere
nce to
Temporary Re
gulations
Nuclear Deco
mmissioning
Funds
REG–147290–05
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking
by cross-reference to temporary regula-
tions.
SUMMARY: In this issue of the Bulletin,
the IRS is issuing temporary regulations
(T.D. 9374) under section 468A of the
Internal Revenue Code relating to de-
ductions for contributions to trusts main-
tained for decommissioning nuclear power
plants. The temporary regulations reflect
changes to the law made by the Energy
Policy Act of 2005, and affect most tax-
payers that own an interest in a nuclear
power plant. The text of the temporary
regulations also serves as the text of these
proposed regulations.
DATES: Written or electronic comments
and requests for a public hearing must be
received by March 31, 2008.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR (REG–147290–05), room
5203, Internal Revenue Service, PO Box
7604, Ben Franklin Station, Washing-
ton, DC 20044. Submissions may be
hand delivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to: CC:PA:LPD:PR (REG–147290–05),
Courier’s Desk, Internal Revenue Ser-
vice, 1111 Constitution Avenue, N.W.,
Washington, DC, or sent electroni-
cally, via the Federal eRulemaking
Portal athttp://www.regulations.gov/
(IRS REG–147290–05).
FOR FUR
THER INFORMATION
CONTAC
T: Concerning the regulations,
Patri
ck S. Kirwan, (202) 622–3110; con-
cerni
ng submissions and to request a
heari
ng, Kelly Banks, (202) 622–7180
(not t
oll-free numbers).
SUPPLEMENTAR
Y INFORMATION:
Paperwork Redu
ction Act
The collection o
f information contained
in this notice of
proposed rulemaking has
been submitted t
otheOffice of Manage-
ment and Budget
for review in accor-
dance with the P
aperwork Reduction Act
of 1995 (44 U.S.
C. 3507(d)). OMB has ap-
proved, on a tem
porary basis, the informa-
tion collecti
ons contained in the cross-ref-
erenced tempo
rary rule under control num-
ber 1545–2091
. Comments on the collec-
tion of inform
ation should be sent to the
Office of Man
agement and Budget, Attn:
Desk Officer
for the Department of the
Treasury, Of
fice of Information and Reg-
ulatory Affa
irs, Washington, DC 20503,
with copies t
otheInternal Revenue Ser-
vice,Attn:
IRS Reports Clearance Officer,
SE:W:CAR:M
P:T:T:SP, Washington, DC
20224. Comm
ents on the collection of in-
formation s
hould be received by February
29, 2008. C
omments are specifically re-
quested co
ncerning:
Whether th
eproposedcollectionofin-
formation
is necessary for the proper per-
formance o
f the functions of the IRS, in-
cluding wh
ether the information will have
practical
utility;
The accura
cy of the estimated burden
associate
d with the proposed collection of
informat
ion;
How the qu
ality, utility, and clarity of
the infor
mation to be collected may be en-
hanced;
How the bu
rden of complying with the
proposed
collection of information may be
minimize
d, including through the appli-
cation o
f automated collection techniques
or other
forms of information technology;
and
Estimat
es of capital or start-up costs
and cost
s of operation, maintenance, and
purchas
e of service to provide information.
The coll
ection of information
in this p
roposed regulation is in
§§1.468
A–3T(h), 1.468A–4T, 1.468A–7T,
and 1.4
68A–8T(d). The information col-
lected
under §1.468A–3T(h) is required to
evalua
te whether the taxpayer has prop-
erly de
termined the schedule of ruling
amount
s. The information collected under
§1.468
A–7T pertains to the initial election
to mai
ntain a qualified nuclear decom-
missioning tr
ust fund. The information
collected und
er §1.468A–8T(d) is required
to evaluate wh
ether the taxpayer has prop-
erly determin
ed the schedule of deduction
amounts. The c
ollection of information is
mandatory. T
he likely recordkeepers are
owners of nuc
lear power plants.
Estimated to
tal annual recordkeeping
burden: 2,50
0hours.
The estimate
d annual burden per
recordkeepe
r varies depending on indi-
vidual circu
mstances, with an estimated
average of 25
hours.
Estimated n
umber of recordkeepers:
100.
An agency ma
y not conduct or sponsor,
and a person
is not required to respond to, a
collection
of information unless it displays
a valid cont
rol number assigned by the Of-
fice of Mana
gement and Budget.
Books or rec
ords relating to a collection
of informa
tion must be retained as long
as their co
ntents may become material in
the admini
stration of any internal revenue
law. Gener
ally, tax returns and tax return
informati
on are confidential, as required
by 26 U.S.
C. 6103.
Backgrou
nd
The tempo
rary regulations in this is-
sue of the
Bulletin contain amendments to
26 CFR par
t 1 providing regulations un-
der secti
on 468A of the Internal Revenue
Code of 19
86 (Code). Section 468A was
amended
by section 1310 of the Energy
Policy A
ct of 2005, Public Law 109–58
(119 Sta
t. 594).
Explana
tion of Provisions
The temp
orary regulations in this is-
sue of th
eBulletinamendtheIncomeTax
Regulat
ions (26 CFR part 1) under sec-
tion 46
8A of the Internal Revenue Code
of 1986
(Code). The text of the temporary
regula
tions also serves as the text of these
propos
ed regulations. The preamble to the
tempor
ary regulations explains these pro-
posed
regulations.
Specia
lAnalyses
It has
been determined that this no-
tice o
f proposed rulemaking is not a
signi
ficant regulatoryaction as defined
in Exe
cutive Order 12866. Therefore,
2008–10 I.R.B.576March 10, 2008

a regulatory assessment is not required.
It also has been determined that sec-
tion 553(b) and (d) of the Administra-
tive Procedure Act (5 U.S.C. chapter 5)
does not apply to these regulations. It
is hereby certified that this regulation
will not have a significant economic
impact on a substantial number of small
entities. The proposed regulations do not
impose a collection of information on
small entities. Accordingly, a regulatory
flexibility analysis is not required. We
request comment on the accuracy of
this certification. Pursuant to section
7805(f) of the Code, this regulation has
been submitted to the Chief Counsel
for Advocacy of the Small Business
Administration for comment on its impact
on small business.
Comments and Requests for a Public
Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any written comments (a
signed original and eight (8) copies) or
electronically generated comments that are
submitted timely to the IRS. The IRS and
Treasury Department generally request
comments on the clarity of the proposed
rule and how it may be made easier to
understand. All comments will be avail-
able for public inspection and copying.
A public hearing may be scheduled if re-
quested in writing by a person who timely
submits comments. If a public hearing is
scheduled, notice of the date, time, and
place for the hearing will be published in
theFederal Register.
Drafting Information
The principal author of these regula-
tions is Patrick S. Kirwan, Office of As-
sociate Chief Counsel (Passthroughs and
Special Industries). However, other per-
sonnel from the IRS and Treasury Depart-
ment participated in their development.
*****
Proposed Amendments to the
Regulations
Accordingly, 26 CFR part 1 is amended
as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.468A–5 also issued under 26
U.S.C. 468A(e)(5). * * *
Par. 2. Sections 1.468A–0 through
1.468A–9 are added to read as follows:
§1.468A–0 Table of contents.
[The text of this proposed section is the
same as the text of §1.468A–0T published
elsewhere in this issue of the Bulletin.]
§1.468A–1 Nuclear decommissioning
costs; general rules.
[The text of this proposed section is the
same as the text of §1.468A–1T published
elsewhere in this issue of the Bulletin.]
§1.468A–2 Treatment of electing taxpayer.
[The text of this proposed section is the
same as the text of §1.468A–2T published
elsewhere in this issue of the Bulletin.]
§1.468A–3 Ruling amount.
[The text of this proposed section is the
same as the text of §1.468A–3T published
elsewhere in this issue of the Bulletin.]
§1.468A–4 Treatment of nuclear
decommissioning fund.
[The text of this proposed section is the
same as the text of §1.468A–4T published
elsewhere in this issue of the Bulletin.]
§1.468A–5 Nuclear decommissioning
fund—miscellaneous provisions.
[The text of this proposed section is the
same as the text of §1.468A–5T published
elsewhere in this issue of the Bulletin.]
§1.468A–6 Disposition of an interest in a
nuclear power plant.
[The text of this proposed section is the
same as the text of §1.468A–6T published
elsewhere in this issue of the Bulletin.]
§1.468A–7 Manner of and time for making
election.
[The text of this proposed section is the
same as the text of §1.468A–7T published
elsewhere in this issue of the Bulletin.]
§1.468A–8 Special transfers to qualified
funds pursuant to section 468A(f).
[The text of this proposed section is the
same as the text of §1.468A–8T published
elsewhere in this issue of the Bulletin.]
§1.468A–9 Effective/applicability date
and transitional rules.
[The text of this proposed section is the
same as the text of §1.468A–9T(a) and (b)
published elsewhere in this issue of the
Bulletin.]
Kevin M. Brown,
Deputy Commissioner for
Services and Enforcement.
(Filed by the Office of the Federal Register on December 28,
2007, 8:45 a.m., and published in the issue of the Federal
Register for December 31, 2007, 72 F.R. 74213)
March 10, 20085772008–10 I.R.B.

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the ef-
fect:
Amplifieddescribes a situation where
no change is being made in a prior pub-
lished position, but the prior position is be-
ingextendedtoapplytoavariationofthe
fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that the
same principle also applies to B, the earlier
ruling is amplified. (Compare withmodi-
fied,below).
Clarifiedis used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion.
It is not used where a position in a prior
ruling is being changed.
Distinguisheddescribes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modifiedis used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
withamplifiedandclarified, above).
Obsoleteddescribes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transac-
tions. This term is most commonly used in
a ruling that lists previously published rul-
ings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revokeddescribes situations where the
position in the previously published ruling
is not correct and the correct position is
beingstatedinanewruling.
Supersededdescribes a situation where
the new ruling does nothing more than re-
state the substance and situation of a previ-
ously published ruling (or rulings). Thus,
the term is used to republish under the
1986 Code and regulations the same po-
sition published under the 1939 Code and
regulations. The term is also used when
it is desired to republish in a single rul-
ing a series of situations, names, etc., that
were previously published over a period of
time in separate rulings. If the new rul-
ing does more than restate the substance
of a prior ruling, a combination of terms
is used. For example,modifiedandsu-
persededdescribes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is self
contained. In this case, the previously pub-
lished ruling is first modified and then, as
modified, is superseded.
Supplementedis used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names in
subsequent rulings. After the original rul-
ing has been supplemented several times, a
new ruling may be published that includes
the list in the original ruling and the ad-
ditions, and supersedes all prior rulings in
the series.
Suspendedis used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cases
in litigation, or the outcome of a Service
study.
Abbreviations
The fol
lowing abbreviations in current use
and for
merly used will appear in material
publis
hedintheBulletin.
A—Individual.
Acq.—A
cquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank
.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cu
mulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Coo
perative.
Ct.D.—Court Decision.
CY—County.
D—Decede
nt.
DC—Dummy Corporation.
DE—Donee.
Del. Order
—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Emp
loyer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduc
iary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Fo
reign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Fed
eral Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grante
e.
GP—General Partner.
GR—Grantor.
IC—Insura
nce Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited
Partner.
LR—Lessor.
M—Minor.
Nonacq.—No
nacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Persona
l Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Pa
rtnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Re
al Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsi
diary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target
Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Trans
feree.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpay
er.
TR—Trust.
TT—Trustee.
U.S.C.—Uni
ted States Code.
X—Corporation.
Y—Corporation.
Z—Corporat
ion.
2008–10 I.R.B.iMarch 10, 2008

Numerical Finding List
1
Bulletins 2008–1 through 2008–10
Announcements:
2008-1, 2008-1 I.R.B.246
2008-2, 2008-3 I.R.B.307
2008-3, 2008-2 I.R.B.269
2008-4, 2008-2 I.R.B.269
2008-5, 2008-4 I.R.B.333
2008-6, 2008-5 I.R.B.378
2008-7, 2008-5 I.R.B.379
2008-8, 2008-6 I.R.B.403
2008-9, 2008-7 I.R.B.444
2008-10, 2008-7 I.R.B.445
2008-11, 2008-7 I.R.B.445
2008-12, 2008-7 I.R.B.446
2008-13, 2008-8 I.R.B.480
2008-14, 2008-8 I.R.B.481
2008-15, 2008-9 I.R.B.511
2008-16, 2008-9 I.R.B.511
2008-17, 2008-9 I.R.B.512
Notices:
2008-1, 2008-2 I.R.B.251
2008-2, 2008-2 I.R.B.252
2008-3, 2008-2 I.R.B.253
2008-4, 2008-2 I.R.B.253
2008-5, 2008-2 I.R.B.256
2008-6, 2008-3 I.R.B.275
2008-7, 2008-3 I.R.B.276
2008-8, 2008-3 I.R.B.276
2008-9, 2008-3 I.R.B.277
2008-10, 2008-3 I.R.B.277
2008-11, 2008-3 I.R.B.279
2008-12, 2008-3 I.R.B.280
2008-13, 2008-3 I.R.B.282
2008-14, 2008-4 I.R.B.310
2008-15, 2008-4 I.R.B.313
2008-16, 2008-4 I.R.B.315
2008-17, 2008-4 I.R.B.316
2008-18, 2008-5 I.R.B.363
2008-19, 2008-5 I.R.B.366
2008-20, 2008-6 I.R.B.406
2008-21, 2008-7 I.R.B.431
2008-22, 2008-8 I.R.B.465
2008-23, 2008-7 I.R.B.433
2008-24, 2008-8 I.R.B.466
2008-25, 2008-9 I.R.B.484
2008-26, 2008-9 I.R.B.487
2008-27, 2008-10 I.R.B.543
2008-28, 2008-10 I.R.B.546
Proposed Regulations:
REG-147290-05, 2008-10 I.R.B.576
REG-104713-07, 2008-6 I.R.B.409
Proposed Regulations— Continued:
REG-111583-07, 2008-4 I.R.B.319
REG-114126-07, 2008-6 I.R.B.410
REG-139236-07, 2008-9 I.R.B.491
REG-141399-07, 2008-8 I.R.B.470
REG-147832-07, 2008-8 I.R.B.472
REG-149475-07, 2008-9 I.R.B.510
Revenue Procedures:
2008-1, 2008-1 I.R.B.1
2008-2, 2008-1 I.R.B.90
2008-3, 2008-1 I.R.B.110
2008-4, 2008-1 I.R.B.121
2008-5, 2008-1 I.R.B.164
2008-6, 2008-1 I.R.B.192
2008-7, 2008-1 I.R.B.229
2008-8, 2008-1 I.R.B.233
2008-9, 2008-2 I.R.B.258
2008-10, 2008-3 I.R.B.290
2008-11, 2008-3 I.R.B.301
2008-12, 2008-5 I.R.B.368
2008-13, 2008-6 I.R.B.407
2008-14, 2008-7 I.R.B.435
2008-15, 2008-9 I.R.B.489
2008-16, 2008-10 I.R.B.547
2008-17, 2008-10 I.R.B.549
2008-18, 2008-10 I.R.B.573
Revenue Rulings:
2008-1, 2008-2 I.R.B.248
2008-2, 2008-2 I.R.B.247
2008-3, 2008-2 I.R.B.249
2008-4, 2008-3 I.R.B.272
2008-5, 2008-3 I.R.B.271
2008-6, 2008-3 I.R.B.271
2008-7, 2008-7 I.R.B.419
2008-8, 2008-5 I.R.B.340
2008-9, 2008-5 I.R.B.342
2008-11, 2008-10 I.R.B.541
2008-12, 2008-10 I.R.B.520
2008-13, 2008-10 I.R.B.518
Tax Conventions:
2008-8, 2008-6 I.R.B.403
Treasury Decisions:
9368, 2008-6 I.R.B.382
9369, 2008-6 I.R.B.394
9370, 2008-7 I.R.B.428
9371, 2008-8 I.R.B.447
9372, 2008-8 I.R.B.462
9373, 2008-8 I.R.B.463
9374, 2008-10 I.R.B.521
9375, 2008-5 I.R.B.344
9382, 2008-9 I.R.B.482
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2007–27 through 2007–52 is in Internal Revenue Bulletin
2007–52, dated December 26, 2007.
March 10, 2008ii2008–10 I.R.B.

Finding List of Current Actions on
Previously Published Items
1
Bulletins 2008–1 through 2008–10
Notices:
2001-16
Modified by
Notice 2008-20, 2008-6 I.R.B.406
2006-77
Clarified and amplified by
Notice 2008-25, 2008-9 I.R.B.484
2006-107
Modified by
Notice 2008-7, 2008-3 I.R.B.276
2007-30
Modified and superseded by
Notice 2008-14, 2008-4 I.R.B.310
2007-54
Clarified by
Notice 2008-11, 2008-3 I.R.B.279
Proposed Regulations:
REG-209020-86
Corrected by
Ann. 2008-11, 2008-7 I.R.B.445
REG-113891-07
Hearing scheduled by
Ann. 2008-4, 2008-2 I.R.B.269
Revenue Procedures:
2002-9
Modified by
Rev. Proc. 2008-18, 2008-10 I.R.B.573
2007-1
Superseded by
Rev. Proc. 2008-1, 2008-1 I.R.B.1
2007-2
Superseded by
Rev. Proc. 2008-2, 2008-1 I.R.B.90
2007-3
Superseded by
Rev. Proc. 2008-3, 2008-1 I.R.B.110
2007-4
Superseded by
Rev. Proc. 2008-4, 2008-1 I.R.B.121
2007-5
Superseded by
Rev. Proc. 2008-5, 2008-1 I.R.B.164
2007-6
Superseded by
Rev. Proc. 2008-6, 2008-1 I.R.B.192
Revenue Procedures— Continued:
2007-7
Superseded by
Rev. Proc. 2008-7, 2008-1 I.R.B.229
2007-8
Superseded by
Rev. Proc. 2008-8, 2008-1 I.R.B.233
2007-26
Obsoleted in part by
Rev. Proc. 2008-17, 2008-10 I.R.B.549
2007-39
Superseded by
Rev. Proc. 2008-3, 2008-1 I.R.B.110
2007-52
Superseded by
Rev. Proc. 2008-9, 2008-2 I.R.B.258
2008-13
Corrected by
Ann. 2008-15, 2008-9 I.R.B.511
Revenue Rulings:
2007-4
Supplemented and superseded by
Rev. Rul. 2008-3, 2008-2 I.R.B.249
Treasury Decisions:
9362
Corrected by
Ann. 2008-9, 2008-7 I.R.B.444
Ann. 2008-12, 2008-7 I.R.B.446
9363
Corrected by
Ann. 2008-10, 2008-7 I.R.B.445
9375
Corrected by
Ann. 2008-16, 2008-9 I.R.B.511
1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2007–27 through 2007–52 is in Internal Revenue Bulletin 2007–52, dated December 26,
2007.
2008–10 I.R.B.iiiMarch 10, 2008

March 10, 20082008–10 I.R.B.

2008–10 I.R.B.March 10, 2008

March 10, 20082008–10 I.R.B.

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