Miscellaneous

Useful definitions related to Revenue Rulings.

Limitation on deductions allowable to individuals in certain cases
Where several business activities emanate from a single commodity, such as oil and gas or a tract of land, it does not necessarily follow that such activities are one business for the purposes of section 130 of the Internal Revenue Code of 1939 relating to the limitation on deductions allowable to individuals in certain cases. Where it is shown that such business activities are separately conducted and are not closely interrelated with each other they are considered as separate business activities for the purposes of section 130 of the Code. Regulations 118, Section 39.130-1.
Full Text: 55-121, 1955-1 C.B. 382

Gasoline used on farms
The relief provided by section 6420(a) of the Internal Revenue Code of 1954 does not apply to gasoline used in spraying lawn areas and in cultivating the soil for seeding at schools, churches, institutions and private estates. However, the relief provision applies to gasoline used in spraying fruit orchards.
Full Text: 58-219, 1958-1 C.B. 492

Imposition of tax
A logging contractor, in performing a complete logging operation, including transportation of the logs from the timber tract to a millpond, sawmill, or other designated place, is not a "person engaged in the business of transporting property for hire" within the meaning of section 4272(a) of the Internal Revenue Code of 1954. Therefore, payments for a complete logging operation are not subject to the tax on transportation of property. However, a person who as an independent contractor, contracts only for loading the logs and hauling them to a designated place is a "person engaged in the business of transporting property for hire," and payments for such loading and hauling are subject to the tax on transportation of property.
Full Text: 58-6, 1958-1 C.B. 440

United States-Federal Republic of Germany Income Tax Convention
(Also Income Tax Conventions between the United States and Austria, Belgium, Canada, Denmark, Finland, France, Greece, Honduras, Italy, Japan, Netherlands, Norway, Sweden, Switzerland, the Union of South Africa, and the United Kingdom.) (See also Part I, Sections 901, 904; 26 CFR 1.901-1, 1.904-1.) Even though the income tax conventions to which the United States is a party contain a provision that income from real property shall be subjected to tax only in the country in which the property is situated, a citizen of the United States or an alien resident thereof is, by reason of a saving clause in the convention, liable for United States income tax on the income from such property. In order substantially to avoid double taxation in this type of case, a credit against United States income tax is allowable as provided in section 901 of the Internal Revenue Code of 1954, subject to the limitation of section 904.
Full Text: 59-56, 1959-1 C.B. 737

Personal property, tangible
Trees of fruit orchards or groves do not qualify as tangible personal property within the meaning of section 179 of the Internal Revenue Code of 1954.
Full Text: 67-51, 1967-1 C.B. 68

Imposition of tax
Transfers of interests in certain realty to the United States by Indian wards of the United States are not taxable conveyances of realty for purposes of the tax imposed by section 4361 of the Internal Revenue Code of 1954. 26 CFR 47.4361-1.
Full Text: 68-204, 1968-1 C.B. 494

Section 48: Definitions; Special Rules
Dry-kiln structures, and control rooms structures, used to remove moisture from green lumber are essentially items of machinery and equipment that qualify as section 38 property.
Full Text: 69-557, 1969-2 C.B. 3

Agricultural labor
Services performed for a farm owner in cutting, sawing, and hauling logs to market in clearing timberland for use as an orchard are not "agricultural labor"; however, services performed after the felled timber has been removed are "agricultural labor"; S.S.T. 289 superseded. [26 CFR 31.3121(g)-1 (Also Sections 3306, 3401; 31.3306(k)-1, 31.3401(a)(2)-1.)]
Full Text: 70-112 1, 1970-1 C.B. 207

Who are employees
Piecemakers, skidders, and hired assistants engaged under an oral contract by a logging company that retains the right to control and direct their services are employees of the company; S.S.T. 396 superseded. [26 CFR 31.3121(d)-1 (Also Section 3306, 3401; 31.3306(i)-1, 31.3401(c)-1.)]
Full Text: 71-273, 1971-1 C.B. 286

Who are employees
An individual who contracts to furnish men and equipment to cut, skid, and haul timber for a company that exercises no control or supervision over the individual's operation methods is not an employee of the company; S.S.T. 399 superseded. [26 CFR 31.3121(d)-1 (Also Sections 3306, 3401; 31.3306(i)-1, 31.3401(c)-1.)]
Full Text: 71-274, 1971-1 C.B. 287

Definitions and special rules
Distributions of net earnings by a nonexempt cooperative association to its member-stockholders based on man-hours worked are patronage dividends; gain recognized under an election to treat the cutting of timber as a sale or exchange is patronage income; Revenue Ruling 61-47 revoked.
Full Text: 71-439, 1971-2 C.B. 321

Investment credit
Section 48.--Definitions; Special Rules - Temporary logging roads and log dumps constructed under a Form 2400-5 United States Forest Service timber cutting contract are "section 38 property"; Rev. Rul. 68-281 distinguished.
Full Text: 73-217, 1973-1 C.B. 35

Nonexempt cooperative; patronage income
Gain recognized by a nonexempt cooperative engaged in the manufacture of wood products under an election to treat the cutting of timber as a sale or exchange is patronage income in the year recognized to the extent attributable to member workers and will qualify for distribution as a patronage dividend. That portion of the gain attributable to nonmember workers is not patronage income and will not qualify. Rev. Rul. 71-439 amplified.
Full Text: 74-24, 1974-1 C.B. 244

Cooperative marketing forest products, definition of "farming"
A federated cooperative marketing newsprint, and its member cooperatives growing pulpwood, are not engaged in the business of farming and do not qualify for the exemption from federal income tax as farmers' cooperatives within the meaning of section 521 of the Code.
Full Text: 84-81, 1984-1 C.B. 135

Gross income: Exclusion from
Cost sharing: Wetlands Reserve Program: Environmental Quality Incentives Program: Wildlife Habitat Incentives Program - Payments received for efforts to protect small watersheds under the Wetlands Reserve Program, the Environmental Quality Incentives Program, and the Wildlife Habitat Incentives Program are excludable from gross income. These programs are substantially similar to the types of programs described in Code Sec. 126 , which exempts from gross income portions of the payments received from federal and state governments for a share of the costs of improvements made under certain environmental programs.
Full Text: 97-55, I.R.B. 1997-52, 7

Estate tax: Special use valuation: Interest rates
Estate tax: Special use valuation: Farms: Interest rates.--The IRS has issued a listing of the average annual effective interest rates charged on new loans under �the Farm Credit Bank system. The rates are used in computing the value of farm real property for which a special use valuation election is made and may be used by estates that value farmland under Code Sec. 2032A as of a date in 1998.
Full Text: 98-22, I.R.B. 1998-19

Estate tax: Special use valuation: Farms: Interest rates
The IRS has issued a listing of the average annual effective interest rates charged on new loans under the Farm Credit Bank system. The rates are used in computing the value of farm real property for which a special use valuation election is made and may be used by estates that value farmland under Code Sec. 2032A as of a date in 1999.
Full Text: 99-20, I.R.B. 1999-18

Estate Tax: Special Use Valuation: Farms: Interest Rates
The IRS has issued a listing of the average annual effective interest rates charged on new loans under the Farm Credit Bank system. The rates are used in computing the value of farm real property for which a special use valuation election is made and may be used by estates that value farmland under Code Sec. 2032A as of a date in 2000.
Full Text: 00-26, I.R.B. 2000-22

Estate tax: Special Use Valuation: Farms: Interest Rates
The IRS has issued a listing of the average annual effective interest rates charged on new loans under the Farm Credit Bank system. The rates are used in computing the value of farm real property for which a special use valuation election is made and may be used by estates that value farmland under Code Sec. 2032A as of a date in 2001.
Full Text: 01-21, I.R.B. 2001-18

Estate tax: Special Use valuation: Farms: Interest Rates
The IRS has issued a listing of the average annual effective interest rates charged on new loans under the Farm Credit Bank system. The rates are used in computing the value of farm real property for which a special use valuation election is made and may be used by estates that value farmland under Code Sec. 2032A as of a date in 2002.
Full Text: 02-26, I.R.B. 2002-19

Estate tax: Special use valuation: Farms: Interest rates
The IRS has issued a listing of the average annual effective interest rates on new loans under the Farm Credit Bank system. The rates are used in computing the value of farm real property for which a special use valuation election is made under Code Sec. 2032A . The rates may be used by estates that value farmland under Code Sec. 2032A as of a date in 2003.
Full Text: 03-53, I.R.B., 2003-22

Estate tax: Special use valuation: Farms: Interest rates.
Special use value; farms; interest rates. The 2004 interest rates to be used in computing the special use value of farm real property for which an election is made under section 2032A of the Code are listed for estates of decedents.
Full Text: 04-63, I.R.B.

Estate tax: Special use valuation: Farms: Interest rates.
A listing of the average annual effective interest rates on new loans under the Farm Credit System has been issued by the IRS. The rates are used in computing the special use value of farm real property for which an election is made under Code Sec. 2032A. The rates may be used by estates that value farmland under Code Sec. 2032A as of a date in 2005.
Full Text: 05-41, I.R.B., 2005-28