REVENUE RULE 90-25

1990-1 C.B. 10, 1990-12 I.R.B. 5.

Internal Revenue Service
Revenue Ruling

OBSOLETE REVENUE RULING

Published: March 19, 1990

Section 47. - Certain Dispositions, etc., of Section 38 Property, 26 CFR 1.47-1: Recomputation of credit allowed by section 38.

(Also Section 1398.)

Obsolete revenue ruling. Rev. Rul. 74-26 relating to transfers (other than by sale or exchange) of section 38 property from an individual debtor to a trustee in a bankruptcy proceeding that was commenced after March 24, 1981, is declared obsolete.

Section 1398(f)(1) of the Internal Revenue Code, which is applicable to any case under Chapter 7 or Chapter 11 of Title 11 of the United States Code in which the debtor is an individual, provides that a transfer (other than by sale or exchange) of an asset from the debtor to the estate shall not be treated as a disposition for purposes of any provision of the Code assigning tax consequences to a disposition, and that the estate shall be treated as the debtor would be treated with respect to such asset. Section 1398(f)(1) is effective for bankruptcy cases commencing after March 24, 1981. Rev. Rul. 74- 26, 1974-1 C.B. 7, holds that a transfer in a bankruptcy proceeding of an individual's section 38 property to a trustee in bankruptcy is a transfer within the meaning of section 1.47- 1(c)(1)(ii) of the Income Tax Regulations that results in a recapture determination under section 47. Accordingly, Rev. Rul. 74-26 is obsoleted for transfers (other than by sale or exchange) of section 38 property from an individual debtor to a trustee in a bankruptcy proceeding that was commenced after March 24, 1981, under Chapter 7 or Chapter 11 of Title 11 of the United States Code.

EFFECT ON OTHER REVENUE RULINGS

Rev. Rul. 74-26 is obsoleted for transfers (other than by sale or exchange) of section 38 property from an individual debtor to a trustee in a bankruptcy proceeding that was commenced after March 24, 1981, under Chapter 7 or Chapter 11 of Title 11 of the United States Code.

DRAFTING INFORMATION

The principal author of this revenue ruling is Glenn Bogdonoff of the Office of Assistant Chief Counsel (Passthroughs and Special Industries). For further information regarding this revenue ruling contact Glen Bogdonoff on (202) 377- 6349 (not a toll-free call).

Rev. Rul. 90-25, 1990-1 C.B. 10, 1990-12 I.R.B. 5.