[Federal Register Volume 69, Number 150 (Thursday, August 5, 2004)]
[Proposed Rules]
[Pages 47395-47396]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17797]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-171386-03]
RIN 1545-BD16


Time and Manner of Making Section 163(d)(B) Election to Treat 
Qualified Dividend Income as Investment Income

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations.

-----------------------------------------------------------------------

SUMMARY: In the Rules and Regulations section of this issue of the 
Federal Register, the IRS is issuing temporary regulations relating to 
an election that may be made by noncorporate taxpayers to treat 
qualified dividend income as investment income for purposes of 
calculating the deduction for investment interest. The text of those 
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 November 3, 2004.

[[Page 47396]]


ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-171386-03), room 
5203, Internal Revenue Service, POB 7604, Ben Franklin Station, 
Washington, DC 20044. Alternatively, 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-171386-03), Courier's Desk, Internal Revenue Service, 
1111 Constitution Avenue, NW., Washington, DC. Taxpayers also may 
submit comments electronically to the IRS Internet site at http://www.irs.gov/regs or via the Federal eRulemaking Portal at http://www.regulations.gov (indicate IRS and REG-171386-03 or RIN 1545-BD16).

FOR FURTHER INFORMATION CONTACT: Concerning submission of comments or 
requesting a hearing, LaNita Van Dyke, (202) 622-7180; concerning the 
proposed regulations, Amy Pfalzgraf, (202) 622-4950 (not toll-free 
numbers).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

    Temporary regulations in the Rules and Regulations section of this 
issue of the Federal Register amend the Income Tax Regulations (26 CFR 
part 1) relating to section 163(d)(4)(B) of the Internal Revenue Code. 
The temporary regulations provide rules regarding the time and manner 
for making an election under section 163(d)(4)(B) to treat qualified 
dividend income as investment income for purposes of calculating the 
deduction for investment interest. The text of the temporary 
regulations also serves as the text of these proposed regulations. The 
preamble to the temporary regulations explains the amendments.

Special Analyses

    It has been determined that this notice of proposed rulemaking is 
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 Internal Revenue Code, this 
notice of proposed rulemaking will be 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 electronic comments that are submitted timely 
to the IRS. The IRS and Treasury Department request comments on the 
clarity of the proposed rules and how they can be made easier to 
understand. All comments will be available for public inspection and 
copying. A public hearing will be scheduled if requested in writing by 
any person that timely submits written comments. If a public hearing is 
scheduled, notice of the date, time, and place for the public hearing 
will be published in the Federal Register.

Drafting Information

    The principal author of these regulations is Amy Pfalzgraf of the 
Office of Associate Chief Counsel (Income Tax & 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.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 1 is proposed to be 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 * * *

    Par. 2. Section 1.163(d)-1 is revised to read as follows:


Sec.  1.163(d)-1  Time and manner for making elections under the 
Omnibus Budget Reconciliation Act of 1993 and the Jobs and Growth Tax 
Relief Reconciliation Act of 2003.

    [The text of proposed paragraphs (a), (b), (c), and (d) is the same 
as the text of paragraphs (a), (b), (c), and (d) of Sec.  1.163(d)-1T 
published elsewhere in this issue of the Federal Register.]

Nancy J. Jardini,
Acting Deputy Commissioner for Services and Enforcement.
[FR Doc. 04-17797 Filed 8-4-04; 8:45 am]
BILLING CODE 4830-01-P