Additional Rules for Exchanges of Personal Property Under Section 1031(a), 28818-28820 [05-9960]
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Federal Register / Vol. 70, No. 96 / Thursday, May 19, 2005 / Rules and Regulations
other locations if such activities
constitute occasional lectures or
consultations permitted by paragraph (g)
of this section. All such sites of activity
must be entered into SEVIS while the
exchange visitor’s SEVIS record is in
Initial or Active status.
(g) Occasional lectures or
consultations. Professors and research
scholars may participate in occasional
lectures and short-term consultations, if
authorized to do so by his or her
sponsor. Such lectures and
consultations must be incidental to the
exchange visitor’s primary program
activities. If wages or other
remuneration are received by the
exchange visitor for such activities, the
exchange visitor must act as an
independent contractor, as such term is
defined in 8 CFR 274a.1(j), and the
following criteria and procedures must
be satisfied:
(1) Criteria. The occasional lectures or
short-term consultations must:
(i) Be directly related to the objectives
of the exchange visitor’s program;
(ii) Be incidental to the exchange
visitor’s primary program activities;
(iii) Not delay the completion date of
the exchange visitor’s program; and
(iv) Be documented in SEVIS.
(2) Procedures. (i) To obtain
authorization to engage in occasional
lectures or short-term consultations
involving wages or other remuneration,
the exchange visitor must present to the
responsible officer:
(A) A letter from the offeror setting
forth the terms and conditions of the
offer to lecture or consult, including the
duration, number of hours, field or
subject, amount of compensation, and
description of such activity; and
(B) A letter from the exchange
visitor’s department head or supervisor
recommending such activity and
explaining how the activity would
enhance the exchange visitor’s program.
(ii) The responsible officer must
review the letters required in paragraph
(g)(2)(i) of this section and make a
written determination whether such
activity is warranted, will not interrupt
the exchange visitor’s original objective,
and satisfies the criteria set forth in
paragraph (g)(1) of this section.
(h) Change of activity. At the
discretion and approval of the
responsible officer, professors may
freely engage in research and research
scholars may freely engage in teaching
and lecturing. Because these activities
are intertwined, such a change of
activity is not considered a change of
category necessitating formal approval
by the Department of State and does not
require the issuance of a new Form DS–
2019 to reflect a change in category.
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Jkt 205001
Such change in activity does not extend
the exchange visitor’s maximum
duration of program participation.
(i) Duration of participation. The
permitted duration of program
participation for a professor or research
scholar is as follows:
(1) General limitation. A professor or
research scholar may be authorized to
participate in the Exchange Visitor
Program for the length of time necessary
to complete his or her program,
provided such time does not exceed five
years. The five-year period of permitted
program participation is continuous and
begins with the initial program begin
date documented in SEVIS or the date
such status was acquired via a petition
submitted and approved by the
Department of Homeland Security
(DHS) as documented in SEVIS and
ends five years from such date.
(2) Repeat participation. Exchange
participants who have entered the
United States under the Exchange
Visitor Program as a professor or
research scholar, or who have acquired
such status while in the United States,
and who have completed his or her
program are not eligible for
participation as a professor or research
scholar for a period of two years
following the end date of such program
participation as identified in SEVIS.
(3) Extensions. A responsible officer
may not extend the period of program
duration beyond the five-year period of
maximum program duration authorized
for professor and research scholar
participants. The Department may, in its
sole discretion, authorize an extension
beyond the permitted five-year period,
as submitted by a ‘‘G–7’’ program
sponsor, upon successful demonstration
of the following:
(i) The participant for whom an
extension is requested is engaged in a
research project under the direct
sponsorship of a Federally Funded
National Research and Development
Center (‘‘FFNRDC’’) or a U.S. Federal
Laboratory;
(ii) The FFNRDC or U.S. Federal
Laboratory requesting the extension on
behalf of the participant has
determined, through peer review, that
the participant’s continued involvement
in the project is beneficial to its
successful conclusion; and
(iii) The Secretary of the Department
of Homeland Security has determined in
his/her discretion that the extension
may be approved;
(iv) The extension request is for not
more than five years.
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Dated: May 10, 2005.
Patricia S. Harrison,
Assistant Secretary, Bureau of Educational
and Cultural Affairs, Department of State.
[FR Doc. 05–10020 Filed 5–18–05; 8:45 am]
BILLING CODE 4710–05–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9202]
RIN 1545–BD25
Additional Rules for Exchanges of
Personal Property Under Section
1031(a)
Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations and removal of
temporary regulations.
AGENCY:
SUMMARY: This document contains final
regulations that replace the use of the
Standard Industrial Classification (SIC)
system with the North American
Industry Classification System (NAICS)
for determining what properties are of a
like class for purposes of section 1031
of the Internal Revenue Code (Code).
The regulations affect taxpayers that
engage in like-kind exchanges of
depreciable tangible personal property.
DATES: Effective Date: These regulations
are effective May 19, 2005.
Applicability Dates: For dates of
applicability, see § 1.1031(a)–2(d).
FOR FURTHER INFORMATION CONTACT: J.
Peter Baumgarten, (202) 622–4920 (not
a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments
to 26 CFR part 1. On August 13, 2004,
the IRS and Treasury Department
published in the Federal Register a
notice of proposed rulemaking (REG–
116265–04; 69 FR 50108) by cross
reference to temporary regulations (TD
9151; 69 FR 50067) under section
1031(a). These amendments relate to the
transition from the use of the four-digit
codes under the SIC system to the sixdigit NAICS for determining product
classes of depreciable tangible personal
property exchanged under section 1031.
No written or electronic comments in
response to the proposed regulations or
requests to speak at a public hearing
were received, and no hearing was held.
The proposed regulations under section
1031 are adopted by this Treasury
decision, and the temporary regulations
are removed.
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Federal Register / Vol. 70, No. 96 / Thursday, May 19, 2005 / Rules and Regulations
Effective Date
These final regulations apply to
transfers of property made by taxpayers
on or after August 12, 2004. However,
taxpayers may apply the regulations to
transfers of property made by taxpayers
on or after January 1, 1997, in taxable
years for which the period of limitation
for filing a claim for refund or credit
under section 6511 has not expired.
Additionally, taxpayers may treat
properties within the same product
classes under a 4-digit SIC code as
properties of like class for transfers of
property made by taxpayers on or before
May 19, 2005.
Special Analysis
It has been determined that these final
regulations are not a significant
regulatory action as defined in
Executive Order 12866. Therefore, a
regulatory assessment is not required. It
also has been determined that section
553(b) of the Administrative Procedure
Act (5 U.S.C. chapter 5) does not apply
to these regulations, and, because the
regulations do not impose a collection
of information on small entities, the
Regulatory Flexibility Act (5 U.S.C.
chapter 6) does not apply. Pursuant to
section 7805(f) of the Code, the notice
of proposed rulemaking that preceded
these regulations was submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment
on its impact on small business.
Drafting Information
The principal author of these final
regulations is J. Peter Baumgarten of the
Office of the Associate Chief Counsel
(Income Tax and Accounting). However,
other personnel from the IRS and
Treasury Department participated in
their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR part 1 is amended
as follows:
I
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 continues to read, in part, as
follows:
I
Authority: 26 U.S.C. 7805. * * *
I Par. 2. Section 1.1031(a)–2 is amended
by:
I 1. Revising paragraphs (b)(3) through
(b)(6), Example 3 and Example 4 of
paragraph (b)(7), and paragraph (d).
I 2. Adding paragraph (b)(8).
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15:30 May 18, 2005
Jkt 205001
The revisions and addition read as
follows.
§ 1.1031(a)–2 Additional rules for
exchanges of personal property.
*
*
*
*
*
(b) * * *
(3) Product classes. Except as
provided in paragraphs (b)(4) and (5) of
this section, or as provided by the
Commissioner in published guidance of
general applicability, property within a
product class consists of depreciable
tangible personal property that is
described in a 6-digit product class
within Sectors 31, 32, and 33
(pertaining to manufacturing industries)
of the North American Industry
Classification System (NAICS), set forth
in Executive Office of the President,
Office of Management and Budget,
North American Industry Classification
System, United States, 2002 (NAICS
Manual), as periodically updated.
Copies of the NAICS Manual may be
obtained from the National Technical
Information Service, an agency of the
U.S. Department of Commerce, and may
be accessed on the internet. Sectors 31
through 33 of the NAICS Manual
contain listings of specialized industries
for the manufacture of described
products and equipment. For this
purpose, any 6-digit NAICS product
class with a last digit of 9 (a
miscellaneous category) is not a product
class for purposes of this section. If a
property is listed in more than one
product class, the property is treated as
listed in any one of those product
classes. A property’s 6-digit product
class is referred to as the property’s
NAICS code.
(4) Modifications of NAICS product
classes. The product classes of the
NAICS Manual may be updated or
otherwise modified from time to time as
the manual is updated, effective on or
after the date of the modification. The
NAICS Manual generally is modified
every five years, in years ending in a 2
or 7 (such as 2002, 2007, and 2012). The
applicability date of the modified
NAICS Manual is announced in the
Federal Register and generally is
January 1 of the year the NAICS Manual
is modified. Taxpayers may rely on
these modifications as they become
effective in structuring exchanges under
this section. Taxpayers may rely on the
previous NAICS Manual for transfers of
property made by a taxpayer during the
one-year period following the effective
date of the modification. For transfers of
property made by a taxpayer on or after
January 1, 1997, and on or before
January 1, 2003, the NAICS Manual of
1997 may be used for determining
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28819
product classes of the exchanged
property.
(5) Administrative procedures for
revising general asset classes and
product classes. The Commissioner
may, through published guidance of
general applicability, supplement,
modify, clarify, or update the guidance
relating to the classification of
properties provided in this paragraph
(b). (See § 601.601(d)(2) of this chapter.)
For example, the Commissioner may
determine not to follow (in whole or in
part) a general asset class for purposes
of identifying property of like class, may
determine not to follow (in whole or in
part) any modification of product
classes published in the NAICS Manual,
or may determine that other properties
not listed within the same or in any
product class or general asset class
nevertheless are of a like class. The
Commissioner also may determine that
two items of property that are listed in
separate product classes or in product
classes with a last digit of 9 are of a like
class, or that an item of property that
has a NAICS code is of a like class to
an item of property that does not have
a NAICS code.
(6) No inference outside of section
1031. The rules provided in this section
concerning the use of general asset
classes or product classes are limited to
exchanges under section 1031. No
inference is intended with respect to the
classification of property for other
purposes, such as depreciation.
(7) Examples. * * *
*
*
*
*
*
Example 3. Taxpayer E transfers a grader
to F in exchange for a scraper. Neither
property is within any of the general asset
classes. However, both properties are within
the same product class (NAICS code 333120).
The grader and scraper are of a like class and
deemed to be of a like kind for purposes of
section 1031.
Example 4. Taxpayer G transfers a personal
computer (asset class 00.12), an airplane
(asset class 00.21) and a sanding machine
(NAICS code 333210), to H in exchange for
a printer (asset class 00.12), a heavy general
purpose truck (asset class 00.242) and a lathe
(NAICS code 333210). The personal
computer and the printer are of a like class
because they are within the same general
asset class. The sanding machine and the
lathe are of a like class because they are
within the same product class (although
neither property is within any of the general
asset classes). The airplane and the heavy
general purpose truck are neither within the
same general asset class nor within the same
product class, and are not of a like kind.
(8) Transition rule. Properties within
the same product classes based on the
4-digit codes contained in Division D of
the Executive Office of the President,
Office of Management and Budget,
Standard Industrial Classification
E:\FR\FM\19MYR1.SGM
19MYR1
28820
Federal Register / Vol. 70, No. 96 / Thursday, May 19, 2005 / Rules and Regulations
Manual (1987), will be treated as
property of a like class for transfers of
property made by taxpayers on or before
May 19, 2005.
*
*
*
*
*
(d) Effective date. Except as otherwise
provided in this paragraph (d), this
section applies to exchanges occurring
on or after April 11, 1991. Paragraphs
(b)(3) through (b)(6), Example 3 and
Example 4 of paragraph (b)(7), and
paragraph (b)(8) of this section apply to
transfers of property made by taxpayers
on or after August 12, 2004. However,
taxpayers may apply paragraphs (b)(3)
through (b)(6), and Example 3 and
Example 4 of paragraph (b)(7) of this
section to transfers of property made by
taxpayers on or after January 1, 1997, in
taxable years for which the period of
limitation for filing a claim for refund or
credit under section 6511 has not
expired.
§ 1.1031(a)–2T
[Removed]
I Par. 3. Section 1.1031(a)–2T is
removed.
§ 1.1031(j)–1
[Amended]
I Par. 4. Section 1.1031(j)–1(d) is
amended by removing the language
‘‘(SIC Code 3531)’’ in Example 3(ii)(C)
and Example 5(i) and adding ‘‘(NAICS
code 333120)’’ in its place.
Approved: May 12, 2005.
Cono R. Namorato,
Acting Deputy Commissioner for Services and
Enforcement.
Eric Solomon,
Acting Deputy Assistant Secretary of the
Treasury.
[FR Doc. 05–9960 Filed 5–18–05; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF THE INTERIOR
Office of Surface Mining Reclamation
and Enforcement
30 CFR Part 913
[Docket No. IL–104–FOR]
Illinois Regulatory Program
Office of Surface Mining
Reclamation and Enforcement, Interior.
ACTION: Final rule; approval of
amendment.
AGENCY:
SUMMARY: We, the Office of Surface
Mining Reclamation and Enforcement
(OSM), are approving an amendment to
the Illinois regulatory program (Illinois
program) under the Surface Mining
Control and Reclamation Act of 1977
(SMCRA or the Act). Illinois proposed
revisions to its regulations and statutes
VerDate jul<14>2003
15:30 May 18, 2005
Jkt 205001
regarding the Surface Mining Advisory
Council, citation references,
typographical errors, procedures for
relocating or closing public roads, and
subsidence control. Illinois intends to
revise its program to provide additional
safeguards and to clarify ambiguities.
DATES: Effective Date: May 19, 2005.
FOR FURTHER INFORMATION CONTACT:
Andrew R. Gilmore, Chief, Alton Field
Division—Indianapolis Area Office.
Telephone: (317) 226–6700. E-mail:
IFOMAIL@osmre.gov.
SUPPLEMENTARY INFORMATION:
I. Background on the Illinois Program
II. Submission of the Amendment
III. OSM’s Findings
IV. Summary and Disposition of Comments
V. OSM’s Decision
VI. Procedural Determinations
I. Background on the Illinois Program
Section 503(a) of the Act permits a
State to assume primacy for the
regulation of surface coal mining and
reclamation operations on non-Federal
and non-Indian lands within its borders
by demonstrating that its State program
includes, among other things, ‘‘a State
law which provides for the regulation of
surface coal mining and reclamation
operations in accordance with the
requirements of this Act * * *; and
rules and regulations consistent with
regulations issued by the Secretary
pursuant to this Act.’’ See 30 U.S.C.
1253(a)(1) and (7). On the basis of these
criteria, the Secretary of the Interior
(Secretary) conditionally approved the
Illinois program on June 1, 1982. You
can find background information on the
Illinois program, including the
Secretary’s findings, the disposition of
comments, and the conditions of
approval, in the June 1, 1982, Federal
Register (47 FR 23858). You can also
find later actions concerning the Illinois
program and program amendments at 30
CFR 913.10, 913.15, 913.16, and 913.17.
II. Submission of the Amendment
By letter dated December 10, 2004
(Administrative Record No. IL–5086),
the Illinois Department of Natural
Resources, Office of Mines and Minerals
(Department) sent us an amendment to
its program under SMCRA (30 U.S.C.
1201 et seq.). The Department sent the
amendment at its own initiative. The
Department proposed to amend its
regulations at 62 Illinois Administrative
Code (IAC) parts 1700, 1761, 1762,
1772, and 1773 and its statutes at 225
Illinois Compiled Statutes (ILCS) 720/
1.04.
We announced receipt of the
proposed amendment in the February 8,
2005, Federal Register (70 FR 6602). In
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Frm 00046
Fmt 4700
Sfmt 4700
the same document, we opened the
public comment period and provided an
opportunity for a public hearing or
meeting on the adequacy of the
amendment. We did not hold a public
hearing or meeting because no one
requested one. The public comment
period ended on March 10, 2005. We
did not receive any public comments.
III. OSM’s Findings
Following are the findings we made
concerning the amendment under
SMCRA and the Federal regulations at
30 CFR 732.15 and 732.17. We are
approving the amendment.
A. Minor Revisions to Illinois’
Regulations
Illinois proposed minor reference,
wording, recodification, and
typographical changes to the following
previously-approved regulations:
1. 62 IAC 1700.17 Administration
In subsection (a), Illinois proposed to
change its reference to SMCRA by
changing it from ‘‘the Surface Mining
Control and Reclamation Act of 1977’’
to ‘‘the Federal Act (30 USCA § 1201 et
seq.).’’ Illinois proposed to update a
citation reference, because of a previous
recodification of statutes, by changing
the citation from ‘‘(Ill. Rev. Stat. 1985,
ch. 127, pars. 1 et seq.)’’ to ‘‘[20 ILCS
5].’’ Also, Illinois proposed to make
various minor wording changes to
clarify the general duties and powers of
the Department. In subsections (a)
through (d), because of a previous
recodification of statutes, Illinois
proposed to update citation references
by changing the citations from ‘‘(Ill. Rev.
Stat. 1985, ch. 96 1⁄2, par. 7909)’’ to
‘‘[225 ILCS 720/9].’’
2. 62 IAC 1761.16 Submission and
Processing of Requests for Valid
Existing Rights Determinations
Illinois proposed to correct two
typographical errors in subsection (b)(3)
by changing a reference from
‘‘subsection (b)(1)’’ to ‘‘subsection
(b)(2)’’ and by changing a reference from
‘‘subsection (b)(2)’’ to ‘‘subsection
(b)(1).’’
3. 62 IAC 1762.15 Exploration on
Lands Designated as Unsuitable for
Surface Coal Mining Operations
Illinois proposed to correct two
references by changing one reference
from ‘‘this Part’’ to ‘‘62 Ill. Adm. Code
1761 through 1764’’ and by changing
the other reference from ‘‘this Part, any
approved State or Federal program, and
other applicable requirements’’ to ‘‘62
Ill. Adm. Code 1700 through 1850 and
other applicable requirements.’’
E:\FR\FM\19MYR1.SGM
19MYR1
]]>Agencies
[Federal Register Volume 70, Number 96 (Thursday, May 19, 2005)]
[Rules and Regulations]
[Pages 28818-28820]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-9960]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9202]
RIN 1545-BD25
Additional Rules for Exchanges of Personal Property Under Section
1031(a)
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations and removal of temporary regulations.
-----------------------------------------------------------------------
SUMMARY: This document contains final regulations that replace the use
of the Standard Industrial Classification (SIC) system with the North
American Industry Classification System (NAICS) for determining what
properties are of a like class for purposes of section 1031 of the
Internal Revenue Code (Code). The regulations affect taxpayers that
engage in like-kind exchanges of depreciable tangible personal
property.
DATES: Effective Date: These regulations are effective May 19, 2005.
Applicability Dates: For dates of applicability, see Sec.
1.1031(a)-2(d).
FOR FURTHER INFORMATION CONTACT: J. Peter Baumgarten, (202) 622-4920
(not a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
This document contains amendments to 26 CFR part 1. On August 13,
2004, the IRS and Treasury Department published in the Federal Register
a notice of proposed rulemaking (REG-116265-04; 69 FR 50108) by cross
reference to temporary regulations (TD 9151; 69 FR 50067) under section
1031(a). These amendments relate to the transition from the use of the
four-digit codes under the SIC system to the six-digit NAICS for
determining product classes of depreciable tangible personal property
exchanged under section 1031. No written or electronic comments in
response to the proposed regulations or requests to speak at a public
hearing were received, and no hearing was held. The proposed
regulations under section 1031 are adopted by this Treasury decision,
and the temporary regulations are removed.
[[Page 28819]]
Effective Date
These final regulations apply to transfers of property made by
taxpayers on or after August 12, 2004. However, taxpayers may apply the
regulations to transfers of property made by taxpayers on or after
January 1, 1997, in taxable years for which the period of limitation
for filing a claim for refund or credit under section 6511 has not
expired. Additionally, taxpayers may treat properties within the same
product classes under a 4-digit SIC code as properties of like class
for transfers of property made by taxpayers on or before May 19, 2005.
Special Analysis
It has been determined that these final regulations are not a
significant regulatory action as defined in Executive Order 12866.
Therefore, a regulatory assessment is not required. It also has been
determined that section 553(b) of the Administrative Procedure Act (5
U.S.C. chapter 5) does not apply to these regulations, and, because the
regulations do not impose a collection of information on small
entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not
apply. Pursuant to section 7805(f) of the Code, the notice of proposed
rulemaking that preceded these regulations was submitted to the Chief
Counsel for Advocacy of the Small Business Administration for comment
on its impact on small business.
Drafting Information
The principal author of these final regulations is J. Peter
Baumgarten of the Office of the Associate Chief Counsel (Income Tax and
Accounting). However, other personnel from the IRS and Treasury
Department participated in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Adoption of Amendments to the Regulations
0
Accordingly, 26 CFR part 1 is amended as follows:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 continues to read, in
part, as follows:
Authority: 26 U.S.C. 7805. * * *
0
Par. 2. Section 1.1031(a)-2 is amended by:
0
1. Revising paragraphs (b)(3) through (b)(6), Example 3 and Example 4
of paragraph (b)(7), and paragraph (d).
0
2. Adding paragraph (b)(8).
The revisions and addition read as follows.
Sec. 1.1031(a)-2 Additional rules for exchanges of personal property.
* * * * *
(b) * * *
(3) Product classes. Except as provided in paragraphs (b)(4) and
(5) of this section, or as provided by the Commissioner in published
guidance of general applicability, property within a product class
consists of depreciable tangible personal property that is described in
a 6-digit product class within Sectors 31, 32, and 33 (pertaining to
manufacturing industries) of the North American Industry Classification
System (NAICS), set forth in Executive Office of the President, Office
of Management and Budget, North American Industry Classification
System, United States, 2002 (NAICS Manual), as periodically updated.
Copies of the NAICS Manual may be obtained from the National Technical
Information Service, an agency of the U.S. Department of Commerce, and
may be accessed on the internet. Sectors 31 through 33 of the NAICS
Manual contain listings of specialized industries for the manufacture
of described products and equipment. For this purpose, any 6-digit
NAICS product class with a last digit of 9 (a miscellaneous category)
is not a product class for purposes of this section. If a property is
listed in more than one product class, the property is treated as
listed in any one of those product classes. A property's 6-digit
product class is referred to as the property's NAICS code.
(4) Modifications of NAICS product classes. The product classes of
the NAICS Manual may be updated or otherwise modified from time to time
as the manual is updated, effective on or after the date of the
modification. The NAICS Manual generally is modified every five years,
in years ending in a 2 or 7 (such as 2002, 2007, and 2012). The
applicability date of the modified NAICS Manual is announced in the
Federal Register and generally is January 1 of the year the NAICS
Manual is modified. Taxpayers may rely on these modifications as they
become effective in structuring exchanges under this section. Taxpayers
may rely on the previous NAICS Manual for transfers of property made by
a taxpayer during the one-year period following the effective date of
the modification. For transfers of property made by a taxpayer on or
after January 1, 1997, and on or before January 1, 2003, the NAICS
Manual of 1997 may be used for determining product classes of the
exchanged property.
(5) Administrative procedures for revising general asset classes
and product classes. The Commissioner may, through published guidance
of general applicability, supplement, modify, clarify, or update the
guidance relating to the classification of properties provided in this
paragraph (b). (See Sec. 601.601(d)(2) of this chapter.) For example,
the Commissioner may determine not to follow (in whole or in part) a
general asset class for purposes of identifying property of like class,
may determine not to follow (in whole or in part) any modification of
product classes published in the NAICS Manual, or may determine that
other properties not listed within the same or in any product class or
general asset class nevertheless are of a like class. The Commissioner
also may determine that two items of property that are listed in
separate product classes or in product classes with a last digit of 9
are of a like class, or that an item of property that has a NAICS code
is of a like class to an item of property that does not have a NAICS
code.
(6) No inference outside of section 1031. The rules provided in
this section concerning the use of general asset classes or product
classes are limited to exchanges under section 1031. No inference is
intended with respect to the classification of property for other
purposes, such as depreciation.
(7) Examples. * * *
* * * * *
Example 3. Taxpayer E transfers a grader to F in exchange for a
scraper. Neither property is within any of the general asset
classes. However, both properties are within the same product class
(NAICS code 333120). The grader and scraper are of a like class and
deemed to be of a like kind for purposes of section 1031.
Example 4. Taxpayer G transfers a personal computer (asset class
00.12), an airplane (asset class 00.21) and a sanding machine (NAICS
code 333210), to H in exchange for a printer (asset class 00.12), a
heavy general purpose truck (asset class 00.242) and a lathe (NAICS
code 333210). The personal computer and the printer are of a like
class because they are within the same general asset class. The
sanding machine and the lathe are of a like class because they are
within the same product class (although neither property is within
any of the general asset classes). The airplane and the heavy
general purpose truck are neither within the same general asset
class nor within the same product class, and are not of a like kind.
(8) Transition rule. Properties within the same product classes
based on the 4-digit codes contained in Division D of the Executive
Office of the President, Office of Management and Budget, Standard
Industrial Classification
[[Page 28820]]
Manual (1987), will be treated as property of a like class for
transfers of property made by taxpayers on or before May 19, 2005.
* * * * *
(d) Effective date. Except as otherwise provided in this paragraph
(d), this section applies to exchanges occurring on or after April 11,
1991. Paragraphs (b)(3) through (b)(6), Example 3 and Example 4 of
paragraph (b)(7), and paragraph (b)(8) of this section apply to
transfers of property made by taxpayers on or after August 12, 2004.
However, taxpayers may apply paragraphs (b)(3) through (b)(6), and
Example 3 and Example 4 of paragraph (b)(7) of this section to
transfers of property made by taxpayers on or after January 1, 1997, in
taxable years for which the period of limitation for filing a claim for
refund or credit under section 6511 has not expired.
Sec. 1.1031(a)-2T [Removed]
0
Par. 3. Section 1.1031(a)-2T is removed.
Sec. 1.1031(j)-1 [Amended]
0
Par. 4. Section 1.1031(j)-1(d) is amended by removing the language
``(SIC Code 3531)'' in Example 3(ii)(C) and Example 5(i) and adding
``(NAICS code 333120)'' in its place.
Approved: May 12, 2005.
Cono R. Namorato,
Acting Deputy Commissioner for Services and Enforcement.
Eric Solomon,
Acting Deputy Assistant Secretary of the Treasury.
[FR Doc. 05-9960 Filed 5-18-05; 8:45 am]
BILLING CODE 4830-01-P
