Regulated investment company (RIC). This ruling provides that, for purposes of qualifying as a regulated investment company (RIC) under the tax law, a RIC shall treat its investment in refunded bonds as an investment in government securities, to the extent that the acquisition of the refunded bonds would be treated under Rule 5b-3 under the Investment Company Act of 1940 as an acquisition of the Government securities placed in escrow to fund payment of principal and interest on the refunded bonds.

Noncustomary services provided to REIT tenants by a joint venture between a taxable REIT subsidiary and an independent contractor. This ruling provides that a joint venture between a taxable REIT subsidiary and an independent contractor to provide noncustomary services to REIT tenants will not cause rents paid by tenants to fail to qualify as “rents from real property” under section 856 of the Code.

REG-116914-03

Temporary and proposed regulations under section 83 of the Code clarify and amend existing regulations to address the transfers of compensatory stock options to related persons. The regulations provide that the transfer of a compensatory stock option to a related person will not be treated as an arm's length transaction for purposes of section 1.83-7 of the regulations.

This notice announces that regulations issued under section 269B of the Code will provide that a foreign corporation that is stapled to a domestic corporation will be treated as a domestic corporation for purposes of the definition of an includible corporation under section 1504(b) when applying sections 1.904(i)-1 and 1.861-11T(d)(6). Notice 89-94 modified.

This notice clarifies the application of section 911 of the Code to U.S. citizens and residents earning income in Iraq attributable to services performed by such individuals. As long as individuals whose activities in Iraq are permitted by a specific or general license issued by Treasury's Office of Foreign Assets Control, those individuals are not subject to the limitations of section 911(d)(8)(A).

This procedure contains the final withholding foreign partnership (WP) and withholding foreign trust (WT) agreements. The WP and WT agreements are designed to simplify withholding and reporting obligations for payments of income made to foreign partnerships and foreign simple or grantor trusts. This procedure also contains rules regarding withholding and reporting on certain small or related foreign partnerships and foreign simple or grantor trusts that do not enter into WP or WT agreements. Section III.C. of Notice 2001-4 superseded for 2004 and subsequent calendar years. Rev. Proc. 2000-12 modified.