Rev. Rul. 2012-29 - Effective date of RIC changes for purposes of section 4982 excise tax 

September 26:  The IRS today released an advance copy of Rev. Rul. 2012-29 concerning regulated investment companies (RICs).

Overview

Rev. Rul. 2012-29 addressed the question: How does the effective date provision of

section 101(c) of the Regulated Investment Company Modernization Act of 2010 (date of enactment: December 22, 2010) apply for purposes of the excise tax imposed by section 4982?


The IRS addressed the following scenario in the revenue ruling:


  • A corporation is taxed as a RIC, and uses a tax year ending on June 30 for income tax purposes.
  • The corporation recognized long-term capital losses on November 1, 2010, January 3, 2011, and July 1, 2011, but recognized no other capital gains or losses from July 1, 2010, through June 30, 2012.

Today’s revenue ruling concludes that for purposes of the excise tax imposed under section 4982, the 2010 Act amendments to the loss carryover rules of section 1212(a) apply beginning with any net capital loss recognized in the period that determines a regulated investment company’s required distribution for calendar year 2011.


Accordingly, Rev. Rul. 2012-29 concludes that the amendments apply to net capital losses recognized during the one-year period that (absent an election under section 4982(e)(4)) begins on November 1, 2010.


Text of the revenue ruling: Rev. Rul. 2012-29 [PDF 73 KB]




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©2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

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