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Abbin, Byrle M.

Carlson, David K.

Estate Planning: Significant recent developments concerning estate planning (Part II)

Manning, Robert F.

Tax Adviser 
Volume 11 Issue 5 Article 5 
1980 
Spotlight 
Robert F. Manning 
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spotlight
__
Editor: ROBERT F. MANNING, J.D.
Legislation
•
 
Installment sales. Rep. Al Ullman (D.-Ore.)  
has introduced the Installment Sales Revision Act
 of 1980 (H.R. 6883). The bill was cosponsored by
 Reps. Barber Conable (R.-N.Y.), Dan Rosten-
 kowski (D.-lll.), and John Duncan (R.-Tenn.).
 Companion legislation (S. 2451) was introduced in
 
the
 Senate by Sens. Russell Long (D.-La.) and  
Robert Dole (R.-Kan.). The new installment sales
 legislation results from suggested modifications in
 connection with similar legislation (H.R. 3899 and
 S. 1063) introduced 
a
 year ago. Among other  
things, the bill would eliminate the 30% initial pay
­ment requirement, the two or more payments re
­quirement, and the selling price requirement for
 casual sales of personal property; provide rules on
 related party sales; and allow installment sale re
­porting by shareholders on Sec. 337 liquidation
 sales.
IRS rulings, etc.
•
 
Business use of car. Last September, the  
IRS announced an increase (from 17 cents to 18.5
 cents 
a
 mile) in the standard mileage rate for the  
first 15,000 miles of business use of a car. (IR-
 2165, 9/27/79.) Now the new rate has been for
­mally promulgated in Rev. Proc. 80-7. But Rev.
 Proc. 80-7 contains 
a
 new rule, not m ntioned in  
IR-2165, concerning the depreciation of a car 
used for business. For taxable years beginning after
 Dec. 31,1979, a car used by 
a
 taxpayer who uses  
the optional method of computing costs will be
 considered to have become fully depreciated at the
 end of five years (unless the taxpayer has elected
to depreciate the car over a shorter useful life). 
So 
after five years, a taxpayer will be able to deduct
 only 10 cents 
a
 mile rather than 18.5 cents a mile.  
Under the 
old
 rules, a car generally wasn’t consid ­
ered fully depreciated until the taxpayer stopped
 using it. (Note: The higher mileage rate is effective
 for expenses paid or incurred after Dec. 31, 1978.
 The new depreciation rule is effective for taxable
 years beginning after Dec. 31, 1979.)
Regulations
•
 
Stock or indebtedness? The IRS has issued  
proposed regulations under 
Sec.
 385 that provide  
rules under which certain interests in corporations
 are treated as either indebtedness, equity, or a
 combination of the two. The regs, also provide safe
 harbors within which interests in 
a
 corporation are  
certain to be treated as indebtedness. In general,
 the proposed regs, apply only to instruments
 (bonds, notes, debentures, etc.), certain cash ad
­vances, and certain preferred stock.
•
 
Employment taxes. The IRS has issued final  
regulations (T.D. 7682) that require employers to
 submit copies of certain employee withholding
 exemption certificates to the IRS. Proposed regs,
 published last October provided for submission of
 a copy of a withholding exemption certificate if the
 total number of withholding exemptions claimed on
 the certificate exceeded nine or 
if
 the certificate  
indicated that the employee was claiming 
a
 status  
exempting him from withholding. The final regs,
 modify the requirement for employees claiming
 exempt status to provide that a copy of the certifi
­cate is not required to be submitted if it is rea
­sonably expected that the employee’s wages won’t
 usually exceed $200 per week. A further modifica
­tion requires submission only of copies of certifi
­cates received on or after April 1,1980, rather than
 after Oct. 9, 1979, as in the proposed regs. (See
 
also,
 Rev. Proc. 80-8 which sets forth the require ­
ments for submitting Forms W-4 on magnetic
 tape.)
•
 
Medical reimbursement plans. The IRS has  
issued proposed regulations under Sec. 105(h) re
­lating to self-insured medical reimbursement
 
plan
s. The regs, reflect changes made by the 78  
Revenue Act.
People
•
 
IRS appeals director. Howard T. Martin has  
been appointed Director of the IRS Appeals Divi
­sion. Mr. Martin, who was previously Director of the
 Disclosure Operations Division, succeeds Roydell
 Fosfeld, who has retired. GS
THE TAX ADVISER, MAY 1980 299
1
Manning: Spotlight
Published by eGrove, 1980


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