Revenue Ruling 2005-34
Rev. Rul. 2005-34
Rev. Rul. 2005-34, 2005-22 I.R.B. 1098
                      Internal Revenue Service (I.R.S.)
                                Revenue Ruling
                    LIFO; PRICE INDEXES; DEPARTMENT STORES
                            Published: May 31, 2005
 Section 472.–Last-in, First-out Inventories, 26 CFR 1.472-1: Last-in, first-out inventories.
 LIFO; price indexes; department stores. The March 2005 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, March 31, 2005.
 LIFO; price indexes; department stores. The March 2005 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, March 31, 2005.
 The following Department Store Inventory Price Indexes for March 2005 were issued by the Bureau of Labor Statistics. The indexes are accepted by the Internal Revenue Service, under s 1.472-1(k) of the Income Tax Regulations and Rev. Proc. 86-46, 1986-2 C.B. 739, for appropriate application to inventories of department stores employing the retail inventory and last-in, first-out inventory methods for tax years ended on, or with reference to, March 31, 2005.
 The Department Store Inventory Price Indexes are prepared on a national basis and include (a) 23 major groups of departments, (b) three special combinations of the major groups — soft goods, durable goods, and miscellaneous goods, and (c) a store total, which covers all departments, including some not listed separately, except for the following: candy, food, liquor, tobacco, and contract departments.
   BUREAU OF LABOR STATISTICS, DEPARTMENT STORE INVENTORY PRICE INDEXES BY
       DEPARTMENT GROUPS (January 1941 = 100, unless otherwise noted)
              Groups                  Mar 2004     Mar 2005      Percent
                                                                  Change from
                                                                  Mar 2004 to
                                                                   Mar 2005
                                                                     [FN1]
——————————————————————————-
1. Piece Goods ……………………….. 491.8Â Â Â Â Â Â Â Â 465.1Â Â Â Â Â Â Â Â Â Â -5.4
2. Domestics and Draperies …………….. 537.6Â Â Â Â Â Â Â Â 536.8Â Â Â Â Â Â Â Â Â Â -0.1
3. Women’s and Children’s Shoes ………… 643.4Â Â Â Â Â Â Â Â 685.9Â Â Â Â Â Â Â Â Â Â Â 6.6
4. Men’s Shoes ……………………….. 840.1Â Â Â Â Â Â Â Â 849.9Â Â Â Â Â Â Â Â Â Â Â 1.2
5. Infants’ Wear ……………………… 593.2Â Â Â Â Â Â Â Â 571.0Â Â Â Â Â Â Â Â Â Â -3.7
6. Women’s Underwear ………………….. 493.6Â Â Â Â Â Â Â Â 547.7Â Â Â Â Â Â Â Â Â Â 11.0
7. Women’s Hosiery ……………………. 334.6Â Â Â Â Â Â Â Â 349.7Â Â Â Â Â Â Â Â Â Â Â 4.5
8. Women’s and Girls’ Accessories ………. 561.7Â Â Â Â Â Â Â Â 607.0Â Â Â Â Â Â Â Â Â Â Â 8.1
9. Women’s Outerwear and Girls’ Wear ……. 379.7Â Â Â Â Â Â Â Â 375.9Â Â Â Â Â Â Â Â Â Â -1.0
10. Men’s Clothing ……………………. 539.2Â Â Â Â Â Â Â Â 564.8Â Â Â Â Â Â Â Â Â Â Â 4.7
11. Men’s Furnishings …………………. 580.7Â Â Â Â Â Â Â Â 587.0Â Â Â Â Â Â Â Â Â Â Â 1.1
12. Boys’ Clothing and Furnishings ……… 451.9Â Â Â Â Â Â Â Â 445.9Â Â Â Â Â Â Â Â Â Â -1.3
13. Jewelry ………………………….. 890.0Â Â Â Â Â Â Â Â 882.1Â Â Â Â Â Â Â Â Â Â -0.9
14. Notions ………………………….. 798.5Â Â Â Â Â Â Â Â 777.7Â Â Â Â Â Â Â Â Â Â -2.6
15. Toilet Articles and Drugs ………….. 982.7Â Â Â Â Â Â Â Â 991.4Â Â Â Â Â Â Â Â Â Â Â 0.9
16. Furniture and Bedding ……………… 620.3Â Â Â Â Â Â Â Â 604.2Â Â Â Â Â Â Â Â Â Â -2.6
17. Floor Coverings …………………… 596.8Â Â Â Â Â Â Â Â 602.4Â Â Â Â Â Â Â Â Â Â Â 0.9
18. Housewares ……………………….. 714.4Â Â Â Â Â Â Â Â 712.2Â Â Â Â Â Â Â Â Â Â -0.3
19. Major Appliances ………………….. 205.2Â Â Â Â Â Â Â Â 205.0Â Â Â Â Â Â Â Â Â Â -0.1
20. Radio and Television ……………….. 43.1Â Â Â Â Â Â Â Â Â 39.5Â Â Â Â Â Â Â Â Â Â -8.4
21. Recreation and Education [FN2] ………. 81.6Â Â Â Â Â Â Â Â Â 79.6Â Â Â Â Â Â Â Â Â Â -2.5
22. Home Improvements [FN2] ……………. 127.8Â Â Â Â Â Â Â Â 137.3Â Â Â Â Â Â Â Â Â Â Â 7.4
23. Automotive Accessories [FN2] ……….. 112.3Â Â Â Â Â Â Â Â 114.4Â Â Â Â Â Â Â Â Â Â Â 1.9
Groups 1-15: Soft Goods ……………….. 564.9Â Â Â Â Â Â Â Â 572.2Â Â Â Â Â Â Â Â Â Â Â 1.3
Groups 16-20: Durable Goods ……………. 387.2Â Â Â Â Â Â Â Â 381.1Â Â Â Â Â Â Â Â Â Â -1.6
Groups 21-23: Misc. Goods [FN2] …………. 93.8Â Â Â Â Â Â Â Â Â 94.0Â Â Â Â Â Â Â Â Â Â Â 0.2
     Store Total [FN3] ……………….. 501.0        504.0           0.6
FN1. Absence of a minus sign before the percentage change in this column
 signifies a price increase.
FN2. Indexes on a January 1986 = 100 base.
FN3. The store total index covers all departments, including some not listed
 separately, except for the following: candy, food, liquor, tobacco and
 contract departments.
DRAFTING INFORMATION
 The principal author of this revenue ruling is Michael Burkom of the Office of Associate Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact Mr. Burkom at (202) 622- 7924 (not a toll-free call).
 Rev. Rul. 2005-34, 2005-22 I.R.B. 1098
Revenue Ruling 2005-32
Rev. Rul. 2005-32
Rev. Rul. 2005-32, 2005-23 I.R.B. 1156
                      Internal Revenue Service (I.R.S.)
                                Revenue Ruling
     FEDERAL RATES; ADJUSTED FEDERAL RATES; ADJUSTED FEDERAL LONG-TERM RATE
                         AND THE LONG-TERM EXEMPT RATE
                            Released: May 20, 2005
                            Published: June 6, 2005
 Section 42.–Low-Income Housing Credit
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of June 2005.
Section 280G.–Golden Parachute Payments
 Federal short-term, mid-term, and long-term rates are set forth for the month of June 2005.
Section 382.–Limitation on Net Operating Loss Carryforwards and Certain Built-In Losses Following Ownership Change
 The adjusted applicable federal long-term rate is set forth for the month of June 2005.
Section 412.–Minimum Funding Standards
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of June 2005.
Section 467.–Certain Payments for the Use of Property or Services
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of June 2005.
Section 468.–Special Rules for Mining and Solid Waste Reclamation and Closing Costs
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of June 2005.
Section 482.–Allocation of Income and Deductions Among Taxpayers
 Federal short-term, mid-term, and long-term rates are set forth for the month of June 2005.
Section 483.–Interest on Certain Deferred Payments
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of June 2005.
Section 642.–Special Rules for Credits and Deductions
 Federal short-term, mid-term, and long-term rates are set forth for the month of June 2005.
Section 807.–Rules for Certain Reserves
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of June 2005.
Section 846.–Discounted Unpaid Losses Defined
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of June 2005.
Section 1288.–Treatment of Original Issue Discount on Tax-Exempt Obligations
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of June 2005.
Section 7520.–Valuation Tables
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of June 2005.
Section 7872.–Treatment of Loans With Below-Market Interest Rates
 The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of June 2005.
Section 1274.–Determination of Issue Price in the Case of Certain Debt Instruments Issued for Property
 Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for June 2005.
 Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, and other sections of the Code, tables set forth the rates for June 2005.
 This revenue ruling provides various prescribed rates for federal income tax purposes for June 2005 (the current month). Table 1 contains the short-term, mid-term, and long-term applicable federal rates (AFR) for the current month for purposes of section 1274(d) of the Internal Revenue Code. Table 2 contains the short-term, mid-term, and long-term adjusted applicable federal rates (adjusted AFR) for the current month for purposes of section 1288(b). Table 3 sets forth the adjusted federal long-term rate and the long-term tax-exempt rate described in section 382(f). Table 4 contains the appropriate percentages for determining the low-income housing credit described in section 42(b)(2) for buildings placed in service during the current month. Finally, Table 5 contains the federal rate for determining the present value of an annuity, an interest for life or for a term of years, or a remainder or a reversionary interest for purposes of section 7520.
—————————————————-
            REV. RUL. 2005-32 TABLE 1
   Applicable Federal Rates (AFR) for June 2005
              Period for Compounding
           Annual   Semiannual Quarterly Monthly
Short-Term
   AFR    3.46%    3.43%      3.42%     3.41%
110% AFRÂ Â Â 3.81%Â Â Â Â 3.77%Â Â Â Â Â Â 3.75%Â Â Â Â Â 3.74%
120% AFRÂ Â Â 4.16%Â Â Â Â 4.12%Â Â Â Â Â Â 4.10%Â Â Â Â Â 4.09%
130% AFRÂ Â Â 4.51%Â Â Â Â 4.46%Â Â Â Â Â Â 4.44%Â Â Â Â Â 4.42%
Mid-Term
   AFR    4.01%    3.97%      3.95%     3.94%
110% AFRÂ Â Â 4.42%Â Â Â Â 4.37%Â Â Â Â Â Â 4.35%Â Â Â Â Â 4.33%
120% AFRÂ Â Â 4.82%Â Â Â Â 4.76%Â Â Â Â Â Â 4.73%Â Â Â Â Â 4.71%
130% AFRÂ Â Â 5.23%Â Â Â Â 5.16%Â Â Â Â Â Â 5.13%Â Â Â Â Â 5.11%
150% AFRÂ Â Â 6.05%Â Â Â Â 5.96%Â Â Â Â Â Â 5.92%Â Â Â Â Â 5.89%
175% AFRÂ Â Â 7.07%Â Â Â Â 6.95%Â Â Â Â Â Â 6.89%Â Â Â Â Â 6.85%
Long-Term
   AFR    4.57%    4.52%      4.49%     4.48%
110% AFRÂ Â Â 5.03%Â Â Â Â 4.97%Â Â Â Â Â Â 4.94%Â Â Â Â Â 4.92%
120% AFRÂ Â Â 5.49%Â Â Â Â 5.42%Â Â Â Â Â Â 5.38%Â Â Â Â Â 5.36%
130% AFRÂ Â Â 5.97%Â Â Â Â 5.88%Â Â Â Â Â Â 5.84%Â Â Â Â Â 5.81%
—————————————————-
—————————————————————
                  REV. RUL. 2005-32 TABLE 2
                 Adjusted AFR for June 2005
                   Period for Compounding
                        Annual Semiannual Quarterly Monthly
Short-term adjusted AFRÂ 2.75%Â Â 2.73%Â Â Â Â Â Â 2.72%Â Â Â Â Â 2.71%
Mid-term adjusted AFRÂ Â Â 3.17%Â Â 3.15%Â Â Â Â Â Â 3.14%Â Â Â Â Â 3.13%
Long-term adjusted AFRÂ Â 4.20%Â Â 4.16%Â Â Â Â Â Â 4.14%Â Â Â Â Â 4.12%
—————————————————————
——————————————————————————-
                          REV. RUL. 2005-32 TABLE 3
                    Rates Under Section 382 for June 2005
Adjusted federal long-term rate for the current month                    4.20%
Long-term tax-exempt rate for ownership changes during the current month 4.37%
 (the highest of the adjusted federal long-term rates for the current
 month and the prior two months.)
——————————————————————————-
——————————————————————————-
                          REV. RUL. 2005-32 TABLE 4
        Appropriate Percentages Under Section 42(b)(2) for June 2005
Appropriate percentage for the 70% present value low-income housing      8.00%
 credit
Appropriate percentage for the 30% present value low-income housing      3.43%
 credit
——————————————————————————-
 Rev. Rul. 2005-32, 2005-23 I.R.B. 1156
Revenue Ruling 2005-33
Rev. Rul. 2005-33
Rev. Rul. 2005-33, 2005-23 I.R.B. 1155
                      Internal Revenue Service (I.R.S.)
                                Revenue Ruling
              INSURANCE COMPANIES; PREMIUM STABILIZATION RESERVES
                            Released: May 13, 2005
                            Published: June 6, 2005
 Section 832.–Insurance Company Taxable Income, 26 CFR 1.832-4.– Gross income.
 Insurance companies; premium stabilization reserves. This ruling holds that additions to premium stabilization reserves are return premiums for purposes of determining the amount of premiums earned on insurance contracts during a taxable year.
ISSUE
 Are additions to a premium stabilization reserve return premiums for purposes of determining the amount of premiums earned on insurance contracts during the taxable year under s 832(b)(4)?
FACTS
 IC is an insurance company other than a life insurance company, taxable under s 831(a) of the Internal Revenue Code. More than half of IC’s business is the issuing of insurance and annuity contracts, including group insurance contracts. Many of IC’s group insurance contracts are experience rated and provide for premium stabilization reserves.
 IC’s premium stabilization reserves are funds that it maintains under its group insurance contracts to stabilize the group policyholders’ premiums over a number of years. These reserves are funded by experience rate credits on the group insurance policies. Specifically, rather than rebate amounts already included in gross premiums written to group policyholders based on experience, IC retains the amounts in premium stabilization reserves to pay extraordinary claims or to offset future premium increases for those policyholders. Each premium stabilization reserve arrangement is individually negotiated with the affected group policyholder. IC is contractually obligated to follow the formula outlined in the insurance contract for applying the premium stabilization reserve against future increases in premiums; the operation of the premium stabilization reserves is not subject to IC’s experience or discretion. The premium stabilization reserves are refundable to the group policyholders in the event the related group insurance contracts are cancelled. Thus, the premium stabilization reserves are not part of IC’s surplus.
LAW AND ANALYSIS
 Section 831(a) imposes a tax for each taxable year on the taxable income of every insurance company other than a life insurance company. Section 832(a) provides that, for this purpose, the term “taxable income” means the gross income as defined in s 832(b)(1) less the deductions allowed by s 832(c).
 Section 832(b)(1) provides that the gross income of an insurance company that is subject to the tax imposed by s 831 includes the combined gross amount earned during the taxable year from investment income and from underwriting income as provided in s 832(b), computed on the basis of the underwriting and investment exhibit of the annual statement approved by the National Association of Insurance Commissioners (NAIC). Under s 832(b)(3), underwriting income consists of the premiums earned on insurance contracts during the taxable year, less losses incurred and expenses incurred.
 Section 832(b)(4) provides that the amount of premiums earned on insurance contracts during the taxable year is computed by subtracting from gross premiums written any return premiums and amounts paid for reinsurance. The amount so obtained is increased by 80 percent of the unearned premiums on outstanding business at the end of the preceding taxable year, and reduced by 80 percent of the unearned premiums on outstanding business at the end of the taxable year.
 Section 1.832-4(a)(6)(i) of the Income Tax Regulations provides that an insurance company’s liability for return premiums includes amounts previously included in an insurance company’s gross premiums written, which are refundable to a policyholder or ceding company, provided that the amounts are fixed by the insurance contract and do not depend on the experience of the insurance company or the discretion of its management.
 Section 1.832-4(a)(4)(i) of the regulations provides that gross premiums written are amounts payable for insurance coverage, and that gross premiums written on an insurance contract include all amounts payable for the effective period of an insurance contract. Section 1.832-4(a)(4)(ii) enumerates specific items that must be included in gross premiums written, including amounts subtracted from a premium stabilization reserve to pay for insurance coverage.
 The amounts that IC adds to its premium stabilization reserves with respect to group insurance contracts are return premiums within the meaning of s 1.832-4(a)(6)(i) of the regulations. The amounts were previously included in IC’s gross premiums written. They do not depend on the experience of IC or the discretion of IC’s management. Pursuant to formulas that are fixed in the group insurance contracts, the amounts are refundable to IC’s group policyholders, either to pay extraordinary claims, to offset future premium increases, or (in the event the contract is cancelled) to rebate the amounts previously paid as premiums.
 Because the amounts that IC adds to its premium stabilization reserves are return premiums within the meaning of s 1.832-4(a)(6)(i) of the regulations, those amounts are subtracted from gross premiums written to compute premiums earned on insurance contracts under s 832(b)(4). When IC subtracts amounts from its premium stabilization reserves in the future to pay for insurance coverage on behalf of the same group policyholders, the amount subtracted will increase gross premiums written under s 1.832-4(a)(4)(ii)(B).
HOLDING
 Additions to a premium stabilization reserve are return premiums for purposes of determining the amount of premiums earned on insurance contracts during the taxable year under s 832(b)(4).
DRAFTING INFORMATION
 The principal author of this revenue ruling is Sheryl B. Flum of the Office of Associate Chief Counsel (Financial Institutions &
Products). For further information regarding this revenue ruling, contact Sheryl B. Flum at (202) 622- 3970 (not a toll-free call).
 Rev. Rul. 2005-33, 2005-23 I.R.B. 1155
Revenue Ruling 2005-29
Rev. Rul. 2005-29
Rev. Rul. 2005-29, 2005-21 I.R.B. 1080
                      Internal Revenue Service (I.R.S.)
                                Revenue Ruling
                   INSURANCE COMPANIES; INTEREST RATE TABLES
                            Released: May 12, 2005
                            Published: May 23, 2005
 Section 807.–Rules for Certain Reserves
 Insurance companies; interest rate tables. Prevailing state assumed interest rates are provided for the determination of reserves under section 807 of the Code for contracts issued in 2004 and 2005. Rev. Rul. 92-19 supplemented in part.
 Insurance companies; interest rate tables. Prevailing state assumed interest rates are provided for the determination of reserves under section 807 of the Code for contracts issued in 2004 and 2005. Rev. Rul. 92-19 supplemented in part.
 For purposes of s 807(d)(4) of the Internal Revenue Code, for taxable years beginning after December 31, 2003, this ruling supplements the schedules of prevailing state assumed interest rates set forth in Rev. Rul. 92-19, 1992-1 C.B. 227. This information is to be used by insurance companies in computing their reserves for (1) life insurance and supplementary total and permanent disability benefits, (2) individual annuities and pure endowments, and (3) group annuities and pure endowments. As s 807(d)(2)(B) requires that the interest rate used to compute these reserves be the greater of (1) the applicable federal interest rate, or (2) the prevailing state assumed interest rate, the table of applicable federal interest rates in Rev. Rul. 92-19 is also supplemented.
 Following are supplements to schedules A, B, C, and D to Part III of Rev. Rul. 92-19, providing prevailing state assumed interest rates for insurance products with different features issued in 2004 and 2005, and a supplement to the table in Part IV of Rev. Rul. 92-19, providing the applicable federal interest rates under s 807(d) for 2004 and 2005. This ruling does not supplement Parts I and II of Rev. Rul. 92-19.
 This is the thirteenth supplement to the interest rates provided in Rev. Rul. 92-19. Earlier supplements were published in Rev. Rul. 93-58, 1993-2 C.B. 241 (interest rates for insurance products issued in 1992 and 1993); Rev. Rul. 94-11, 1994-1 C.B. 196 (1993 and 1994); Rev. Rul. 95-4, 1995-1 C.B. 141 (1994 and 1995); Rev. Rul. 96-2, 1996-1 C.B. 141 (1995 and 1996); Rev. Rul. 97-2, 1997-1 C.B. 134 (1996 and 1997); Rev. Rul. 98-2, 1998-1 C.B. 259 (1997 and 1998); Rev. Rul. 99-10, 1999-1 C.B. 671 (1998 and 1999); Rev. Rul. 2000-17, 2000-1 C.B. 842 (1999 and 2000); Rev. Rul. 2001-11, 2001-1 C.B. 780 (2000 and 2001); Rev. Rul. 2002-12, 2002-1 C.B. 624 (2001 and 2002); Rev. Rul. 2003-24, 2003-1 C.B. 557 (2002 and 2003); and Rev. Rul. 2004-14, 2004-1 C.B. 511 (2003 and 2004).
——————————————————————————-
Part III. Prevailing State Assumed Interest Rates — Products Issued in Years
 After 1982. [FNa1]
                                 Schedule A
 STATUTORY VALUATION INTEREST RATES BASED ON THE 1980 AMENDMENTS TO THE NAIC
                           STANDARD VALUATION LAW
A. Life insurance valuation:
                           Guarantee Duration        Calendar Year of Issue
                                (years)                       2005
                      —————————- ————————–
                      10 or fewer                  5.00 [FNaa1]
                      More than 10 but not more    4.75 [FNaa1]
                        than 20
                      More than 20                 4.50 [FNaa1]
Source: Rates calculated from the monthly averages, ending June 30, 2004, of
 Moody’s Composite Yield on Seasoned Corporate Bonds.
FNa1. The terms used in the schedules in this ruling and in Part III of Rev.
 Rul. 92-19 are those used in the Standard Valuation Law; the terms are
 defined in Rev. Rul. 92-19.
FNaa1. As these rates exceed the applicable federal interest rate for 2005 of
 4.44 percent, the interest rate to be used for this product under s 807 are
 those specified in this table.
Part III, Schedule B
 STATUTORY VALUATION INTEREST RATES BASED ON THE 1980 AMENDMENTS TO THE NAIC
                            STANDARD VALUATION LAW
  B. Single premium immediate annuities and annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options:
       Calendar Year of Issue                 Valuation Interest Rate
————————————–Â —————————————
                2004                                5.50 [FNa1]
Source: Rates calculated from the monthly averages, ending June 30, 2004, of
 Moody’s Composite Yield on Seasoned Corporate Bonds (formerly known as
 Moody’s Corporate Bond Yield Average — Monthly Average Corporates). The
 terms used in this schedule are those used in the Standard Valuation Law as
 defined in Rev. Rul. 92-19.
FNa1. As this prevailing state assumed interest exceeds the applicable
 federal interest rate for 2004 of 4.82 percent, the valuation interest rate
 of 5.50 percent is to be used for this product under s 807.
Part III, Schedule C22 — 2004
 STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD VALUATION LAW FOR
          2004 CALENDAR YEAR BUSINESS GOVERNED BY THE 1980 AMENDMENT
  C. Valuation interest rates for other annuities and guaranteed interest contracts that are valued on an issue year basis:
   Cash        Future    Guarantee Duration   Valuation Interest Rate For
 Settlement    Interest         (years)                 Plan Type
 Options?    Guarantee?
                                                A        B        C
                                                ——————————
Yes          Yes          5 or fewer          5.50     5.00     4.75
                                                                      [FNa1]
                           More than 5, but    5.50     5.00     4.75
                             not more than 10                        [FNa1]
                           More than 10, but   5.00     4.75     4.50
                             not more than 20              [FNa1]   [FNa1]
                           More than 20        4.50     4.25     4.25
                                                  [FNa1]   [FNa1]   [FNa1]
Yes          No           5 or fewer          5.75     5.00     4.75
                                                                      [FNa1]
                           More than 5, but    5.50     5.00     4.75
                             not more than 10                        [FNa1]
                           More than 10, but   5.25     4.75     4.75
                             not more than 20              [FNa1]   [FNa1]
                           More than 20        4.75     4.25     4.25
                                                  [FNa1]   [FNa1]   [FNa1]
No           Yes or No    5 or fewer          5.50
                           More than 5, but    5.50     NOT APPLICABLE
                             not more than 10
                           More than 10, but   5.00
                             not more than 20
                           More than 20        4.50
                                                  [FNa1]
Source: Rates calculated from the monthly averages, ending June 30, 2004, of
 Moody’s Composite Yield on Seasoned Corporate Bonds.
FNa1. As the applicable federal interest rate for 2004 of 4.82 percent
 exceeds this prevailing state assumed interest rate, the interest rate to be
 used for this product under s 807 is 4.82 percent.
Part III, Schedule D22 — 2004
 STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD VALUATION LAW FOR
          2004 CALENDAR YEAR BUSINESS GOVERNED BY THE 1980 AMENDMENT
  D. Valuation interest rates for other annuities and guaranteed interest contracts that are contracts with cash settlement options and that are valued on a change in fund basis:
   Cash        Future    Guarantee Duration   Valuation Interest Rate For
 Settlement    Interest        (years)                  Plan Type
 Options?    Guarantee?
                                               A        B        C
                                               ——————————-
Yes          Yes          5 or fewer         6.00     5.75     4.75 [FNa1]
                           More than 5, but   6.00     5.75     4.75 [FNa1]
                             not more than 10
                           More than 10, but  5.50     5.50     4.75 [FNa1]
                             not more than 20
                           More than 20       5.00     5.00     4.25 [FNa1]
Yes          No           5 or fewer         6.25     6.00     5.00
                           More than 5, but   6.00     6.00     5.00
                             not more than 10
                           More than 10, but  5.75      5.50     4.75 [FNa1]
                             not more than 20
                           More than 20       5.00     5.00     4.50 [FNa1]
Source: Rates calculated from the monthly averages, ending June 30, 2004, of
 Moody’s Composite Yield on Seasoned Corporate Bonds.
FNa1. As the applicable federal interest rate for 2004 of 4.82 percent is
 equal to or exceeds this prevailing state assumed interest rate, the interest
 rate to be used for this product under s 807 is 4.82 percent.
Part IV. Applicable Federal Interest Rates
       TABLE OF APPLICABLE FEDERAL INTEREST RATES FOR PURPOSES OF s 807
Year Interest Rate
—-Â ————-
2004Â Â Â Â Â 4.82
2005Â Â Â Â Â 4.44
 Sources: Rev. Rul. 2003-122, 2003-2 C.B. 1179 for the 2004 rate and Rev. Rul. 2004-106, 2004-49 I.R.B. 893.
EFFECT ON OTHER REVENUE RULINGS
 Rev. Rul. 92-19 is supplemented by the addition to Part III of that ruling of prevailing state assumed interest rates under s 807 for certain insurance products issued in 2003 and 2004 and is further supplemented by an addition to the table in Part IV of Rev. Rul. 92-19 listing applicable federal interest rates. Parts I and II of Rev. Rul. 92-19 are not affected by this ruling.
DRAFTING INFORMATION
 The principal author of this revenue ruling is Ann H. Logan of the Office of Associate Chief Counsel (Financial Institutions and Products). For further information regarding this revenue ruling, contact her at (202) 622-3970 (not a toll-free call).
 Rev. Rul. 2005-29, 2005-21 I.R.B. 1080
Revenue Ruling 2005-29
Rev. Rul. 2005-29
Rev. Rul. 2005-29, 2005-21 I.R.B. 1080
                      Internal Revenue Service (I.R.S.)
                                Revenue Ruling
                   INSURANCE COMPANIES; INTEREST RATE TABLES
                            Released: May 12, 2005
                            Published: May 23, 2005
 Section 807.–Rules for Certain Reserves
 Insurance companies; interest rate tables. Prevailing state assumed interest rates are provided for the determination of reserves under section 807 of the Code for contracts issued in 2004 and 2005. Rev. Rul. 92-19 supplemented in part.
 Insurance companies; interest rate tables. Prevailing state assumed interest rates are provided for the determination of reserves under section 807 of the Code for contracts issued in 2004 and 2005. Rev. Rul. 92-19 supplemented in part.
 For purposes of s 807(d)(4) of the Internal Revenue Code, for taxable years beginning after December 31, 2003, this ruling supplements the schedules of prevailing state assumed interest rates set forth in Rev. Rul. 92-19, 1992-1 C.B. 227. This information is to be used by insurance companies in computing their reserves for (1) life insurance and supplementary total and permanent disability benefits, (2) individual annuities and pure endowments, and (3) group annuities and pure endowments. As s 807(d)(2)(B) requires that the interest rate used to compute these reserves be the greater of (1) the applicable federal interest rate, or (2) the prevailing state assumed interest rate, the table of applicable federal interest rates in Rev. Rul. 92-19 is also supplemented.
 Following are supplements to schedules A, B, C, and D to Part III of Rev. Rul. 92-19, providing prevailing state assumed interest rates for insurance products with different features issued in 2004 and 2005, and a supplement to the table in Part IV of Rev. Rul. 92-19, providing the applicable federal interest rates under s 807(d) for 2004 and 2005. This ruling does not supplement Parts I and II of Rev. Rul. 92-19.
 This is the thirteenth supplement to the interest rates provided in Rev. Rul. 92-19. Earlier supplements were published in Rev. Rul. 93-58, 1993-2 C.B. 241 (interest rates for insurance products issued in 1992 and 1993); Rev. Rul. 94-11, 1994-1 C.B. 196 (1993 and 1994); Rev. Rul. 95-4, 1995-1 C.B. 141 (1994 and 1995); Rev. Rul. 96-2, 1996-1 C.B. 141 (1995 and 1996); Rev. Rul. 97-2, 1997-1 C.B. 134 (1996 and 1997); Rev. Rul. 98-2, 1998-1 C.B. 259 (1997 and 1998); Rev. Rul. 99-10, 1999-1 C.B. 671 (1998 and 1999); Rev. Rul. 2000-17, 2000-1 C.B. 842 (1999 and 2000); Rev. Rul. 2001-11, 2001-1 C.B. 780 (2000 and 2001); Rev. Rul. 2002-12, 2002-1 C.B. 624 (2001 and 2002); Rev. Rul. 2003-24, 2003-1 C.B. 557 (2002 and 2003); and Rev. Rul. 2004-14, 2004-1 C.B. 511 (2003 and 2004).
——————————————————————————-
Part III. Prevailing State Assumed Interest Rates — Products Issued in Years
 After 1982. [FNa1]
                                 Schedule A
 STATUTORY VALUATION INTEREST RATES BASED ON THE 1980 AMENDMENTS TO THE NAIC
                           STANDARD VALUATION LAW
A. Life insurance valuation:
                           Guarantee Duration        Calendar Year of Issue
                                (years)                       2005
                      —————————- ————————–
                      10 or fewer                  5.00 [FNaa1]
                      More than 10 but not more    4.75 [FNaa1]
                        than 20
                      More than 20                 4.50 [FNaa1]
Source: Rates calculated from the monthly averages, ending June 30, 2004, of
 Moody’s Composite Yield on Seasoned Corporate Bonds.
FNa1. The terms used in the schedules in this ruling and in Part III of Rev.
 Rul. 92-19 are those used in the Standard Valuation Law; the terms are
 defined in Rev. Rul. 92-19.
FNaa1. As these rates exceed the applicable federal interest rate for 2005 of
 4.44 percent, the interest rate to be used for this product under s 807 are
 those specified in this table.
Part III, Schedule B
 STATUTORY VALUATION INTEREST RATES BASED ON THE 1980 AMENDMENTS TO THE NAIC
                            STANDARD VALUATION LAW
  B. Single premium immediate annuities and annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options:
       Calendar Year of Issue                 Valuation Interest Rate
————————————–Â —————————————
                2004                                5.50 [FNa1]
Source: Rates calculated from the monthly averages, ending June 30, 2004, of
 Moody’s Composite Yield on Seasoned Corporate Bonds (formerly known as
 Moody’s Corporate Bond Yield Average — Monthly Average Corporates). The
 terms used in this schedule are those used in the Standard Valuation Law as
 defined in Rev. Rul. 92-19.
FNa1. As this prevailing state assumed interest exceeds the applicable
 federal interest rate for 2004 of 4.82 percent, the valuation interest rate
 of 5.50 percent is to be used for this product under s 807.
Part III, Schedule C22 — 2004
 STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD VALUATION LAW FOR
          2004 CALENDAR YEAR BUSINESS GOVERNED BY THE 1980 AMENDMENT
  C. Valuation interest rates for other annuities and guaranteed interest contracts that are valued on an issue year basis:
   Cash        Future    Guarantee Duration   Valuation Interest Rate For
 Settlement    Interest         (years)                 Plan Type
 Options?    Guarantee?
                                                A        B        C
                                                ——————————
Yes          Yes          5 or fewer          5.50     5.00     4.75
                                                                      [FNa1]
                           More than 5, but    5.50     5.00     4.75
                             not more than 10                        [FNa1]
                           More than 10, but   5.00     4.75     4.50
                             not more than 20              [FNa1]   [FNa1]
                           More than 20        4.50     4.25     4.25
                                                  [FNa1]   [FNa1]   [FNa1]
Yes          No           5 or fewer          5.75     5.00     4.75
                                                                      [FNa1]
                           More than 5, but    5.50     5.00     4.75
                             not more than 10                        [FNa1]
                           More than 10, but   5.25     4.75     4.75
                             not more than 20              [FNa1]   [FNa1]
                           More than 20        4.75     4.25     4.25
                                                  [FNa1]   [FNa1]   [FNa1]
No           Yes or No    5 or fewer          5.50
                           More than 5, but    5.50     NOT APPLICABLE
                             not more than 10
                           More than 10, but   5.00
                             not more than 20
                           More than 20        4.50
                                                  [FNa1]
Source: Rates calculated from the monthly averages, ending June 30, 2004, of
 Moody’s Composite Yield on Seasoned Corporate Bonds.
FNa1. As the applicable federal interest rate for 2004 of 4.82 percent
 exceeds this prevailing state assumed interest rate, the interest rate to be
 used for this product under s 807 is 4.82 percent.
Part III, Schedule D22 — 2004
 STATUTORY VALUATION INTEREST RATES BASED ON NAIC STANDARD VALUATION LAW FOR
          2004 CALENDAR YEAR BUSINESS GOVERNED BY THE 1980 AMENDMENT
  D. Valuation interest rates for other annuities and guaranteed interest contracts that are contracts with cash settlement options and that are valued on a change in fund basis:
   Cash        Future    Guarantee Duration   Valuation Interest Rate For
 Settlement    Interest        (years)                  Plan Type
 Options?    Guarantee?
                                               A        B        C
                                               ——————————-
Yes          Yes          5 or fewer         6.00     5.75     4.75 [FNa1]
                           More than 5, but   6.00     5.75     4.75 [FNa1]
                             not more than 10
                           More than 10, but  5.50     5.50     4.75 [FNa1]
                             not more than 20
                           More than 20       5.00     5.00     4.25 [FNa1]
Yes          No           5 or fewer         6.25     6.00     5.00
                           More than 5, but   6.00     6.00     5.00
                             not more than 10
                           More than 10, but  5.75      5.50     4.75 [FNa1]
                             not more than 20
                           More than 20       5.00     5.00     4.50 [FNa1]
Source: Rates calculated from the monthly averages, ending June 30, 2004, of
 Moody’s Composite Yield on Seasoned Corporate Bonds.
FNa1. As the applicable federal interest rate for 2004 of 4.82 percent is
 equal to or exceeds this prevailing state assumed interest rate, the interest
 rate to be used for this product under s 807 is 4.82 percent.
Part IV. Applicable Federal Interest Rates
       TABLE OF APPLICABLE FEDERAL INTEREST RATES FOR PURPOSES OF s 807
Year Interest Rate
—-Â ————-
2004Â Â Â Â Â 4.82
2005Â Â Â Â Â 4.44
 Sources: Rev. Rul. 2003-122, 2003-2 C.B. 1179 for the 2004 rate and Rev. Rul. 2004-106, 2004-49 I.R.B. 893.
EFFECT ON OTHER REVENUE RULINGS
 Rev. Rul. 92-19 is supplemented by the addition to Part III of that ruling of prevailing state assumed interest rates under s 807 for certain insurance products issued in 2003 and 2004 and is further supplemented by an addition to the table in Part IV of Rev. Rul. 92-19 listing applicable federal interest rates. Parts I and II of Rev. Rul. 92-19 are not affected by this ruling.
DRAFTING INFORMATION
 The principal author of this revenue ruling is Ann H. Logan of the Office of Associate Chief Counsel (Financial Institutions and Products). For further information regarding this revenue ruling, contact her at (202) 622-3970 (not a toll-free call).
 Rev. Rul. 2005-29, 2005-21 I.R.B. 1080
Revenue Ruling 2005-31
Rev. Rul. 2005-31
Rev. Rul. 2005-31, 2005-21 I.R.B. 1084
                      Internal Revenue Service (I.R.S.)
                                Revenue Ruling
         DESIGNATION OF DIVIDENDS; REGULATED INVESTMENT COMPANY (RIC)
                             Released: May 4, 2005
                            Published: May 23, 2005
 Section 852.–Taxation of Regulated Investment Companies and Their Shareholders
 In making the dividend designations permitted by sections 852(b)(3)(C) and (b)(5)(A) of the Internal Revenue Code, may a regulated investment company (”RIC”) designate the maximum amount permitted under each provision even if the aggregate of all of the amounts so designated exceeds the total amount of the RIC’s dividend distributions.
Section 871.–Tax on Nonresident Alien Individuals
 In making the dividend designations permitted by sections 871(k)(1)(C) and (2)(C) of the Internal Revenue Code, may a regulated investment company (”RIC”) designate the maximum amount permitted under each provision even if the aggregate of all of the amounts so designated exceeds the total amount of the RIC’s dividend distributions.
Section 854.–Limitations Applicable to Dividends Received From Regulated Investment Company
  Designation of dividends; regulated investment company (RIC). This ruling provides guidance that allows a RIC, in making the dividend designations permitted by sections 852, 854, and 871 of the Code, to designate the maximum amount permitted under each provision even if the total amount so designated exceeds the total amount of the RIC’s dividend distributions. It also allows individual shareholders of the RIC who are U.S. persons to apply designations to the dividends they receive from the RIC that differ from designations applied by shareholders who are nonresident aliens.
 Designation of dividends; regulated investment company (RIC). This ruling provides guidance that allows a RIC, in making the dividend designations permitted by sections 852, 854, and 871 of the Code, to designate the maximum amount permitted under each provision even if the total amount so designated exceeds the total amount of the RIC’s dividend distributions. It also allows individual shareholders of the RIC who are U.S. persons to apply designations to the dividends they receive from the RIC that differ from designations applied by shareholders who are nonresident aliens.
ISSUES
 (1) In making the dividend designations permitted by ss 852(b)(3)(C) and (b)(5)(A), 854(b)(1) and (2), and 871(k)(1)(C) and (2)(C) of the Internal Revenue Code, may a regulated investment company (”RIC”) designate the maximum amount permitted under each provision even if the aggregate of all of the amounts so designated exceeds the total amount of the RIC’s dividend distributions?
 (2) May individual shareholders of the RIC who are United States persons apply designations to the dividends they receive from the RIC that differ from designations applied by shareholders who are nonresident alien individuals?
FACTS
 R, a domestic corporation, is registered under the Investment Company Act of 1940, 15 U.S.C. 80a-1 et seq., as a management company and has elected to be treated as a RIC under subchapter M, part 1, of the Code. Some of the shareholders of R are individuals who are United States persons, and some of the shareholders are nonresident alien individuals. For its first taxable year beginning after December 31, 2004, R’s taxable income consists of $10,000x of dividend income (all of which is qualified dividend income within the meaning of s 1(h)(11)), $10,000x of interest income (all of which is qualified interest income within the meaning of s 871(k)(1)), $5,000x of net short-term capital gain, and $5,000x of net long-term capital gain. R has general and administrative expenses of $10,000x. R distributes $20,000x to its shareholders for the taxable year, of which $20x is received by shareholder A, an individual who is a United States person, and $20x is received by shareholder B, a nonresident alien individual who does not have any effectively connected income as defined in s 864(c).
LAW AND ANALYSIS
 Section 854, as amended by the Jobs and Growth Tax Relief Reconciliation Act of 2003 (the “JGTRRA”), Pub. L. No. 108-27, 117 Stat. 752, and the Working Families Tax Relief Act of 2004, Pub. L. No. 108-311, 118 Stat. 1166, provides rules for determining the amount distributed by a RIC to its shareholders that may be treated by the shareholders as qualified dividend income under s 1(h)(11). Under s 1(h)(11), qualified dividend income received by an individual, estate, or trust is subject to a maximum tax rate of 15 percent. Section 854(b)(1)(C) provides that the aggregate amount that may be designated by a RIC as qualified dividend income for purposes of s 1(h)(11) generally shall not exceed the RIC’s qualified dividend income for the taxable year. Section 854 does not require that this amount be reduced by expenses.
 Section 871(k), as amended by the American Jobs Creation Act of 2004 (the “AJCA”), Pub. L. No. 108-357, 118 Stat. 1418, provides rules for determining the amount distributed by a RIC to its shareholders that may be treated by the shareholders as
interest-related dividends or short-term capital gain dividends. Under s 871(k), an interest-related dividend or a short-term capital gain dividend received by a nonresident alien individual generally is not subject to United States withholding tax.
 Section 871(k)(1)(C) limits the amount a RIC may designate as an interest-related dividend to the RIC’s qualified net interest income for the taxable year. Section 871(k)(1)(D) defines qualified net interest income as a RIC’s qualified interest income reduced by the deductions properly allocable to such income.
 Section 871(k)(2)(C) limits the amount a RIC may designate as a short-term capital gain dividend to the RIC’s qualified short-term gain for the taxable year. Section 871(k)(2)(D) defines qualified short-term gain as the excess of the RIC’s net short-term capital gain for the year over the RIC’s net long-term capital loss for such year, generally determined without regard to any net capital loss or net short-term capital loss attributable to transactions after October 31 of such year. Section 1222(5) defines net short-term capital gain as the excess of short-term capital gains for the taxable year over short-term capital losses
for such year. The Statement of Managers in the Conference Report accompanying the AJCA states, “In computing the amount of short-term capital gain dividends for the year, no reduction is made for the amount of expenses of the RIC allocable to such net gains.” 1 H.R. Rep. No. 548, 108 th Cong., 2d Sess. 166 (2004).
 Section 852(b)(3) provides rules for determining the amount distributed by a RIC to its shareholders that may be treated by the shareholders as a capital gain dividend. Section 852(b)(3)(C) limits the amount a RIC may designate as a capital gain dividend to the RIC’s net capital gain for the taxable year, generally determined without regard to any net capital loss or net long-term capital loss attributable to transactions after October 31 of such year. Section 1222(11) defines net capital gain as the excess of the net long-term capital gain for the taxable year over the net short-term capital loss for such year.
 For purposes of determining the taxable income of a RIC under subchapter M, s 852(b) separates a RIC’s net capital gain from its other income (identified as “investment company taxable income”). Section 852(b)(3) imposes a tax on the excess of the RIC’s net capital gain over its deduction for dividends paid determined with reference to capital gains dividends only. A RIC is not allowed any deduction for expenses against its net capital gain. A RIC’s investment company taxable income equals its taxable income (exclusive of net capital gain) reduced by allowable expenses and its deduction for dividends paid determined without regard to capital gains dividends and exempt-interest dividends. Thus, the basic pattern for taxing a RIC’s income treats its expenses as allocable only to its investment company taxable income (exclusive of net capital gain).
 In this situation, under s 852(b)(3)(C), the maximum amount R may designate as capital gain dividends is $5,000x, which is the amount of R’s net capital gain for the taxable year ($5,000x of net long-term capital gain less $0x of net short-term capital loss). Of the remaining distribution of $15,000x for the taxable year, R applies the rules of ss 854 and 871 to determine the maximum amounts it may designate as qualified dividend income, short-term capital gain dividends, and interest-related dividends. Under s 854(b)(1)(C), the maximum amount R may designate as distributions of qualified dividend income is $10,000x, which is the amount of R’s qualified dividend income for the taxable year, unreduced by expenses. Under s 871(k)(2)(C), the maximum amount R may designate as short-term capital gain dividends is $5,000x, which is the amount of R’s net short-term capital gain unreduced by expenses allocable to that net gain. Under s 871(k)(1)(C), the maximum amount R may designate as interest-related dividends is $10,000x (the amount of R’s qualified interest income), less the amount of R’s expenses properly allocable to that income. Given the specific provisions of s 852(b)(3) precluding an allocation of expenses to reduce net capital gain, and taking into account the statement in the Conference Report that assumes that a portion of a RIC’s expenses are allocable to its short-term gains, R may reasonably determine that its expenses should be allocated pro rata to the components of its income included in RIC taxable income (qualified dividends, interest, and short-term gains) and that the amount of its expenses properly allocable to interest income is $4,000x. Accordingly, the maximum amount R may designate as interest-related dividends is $6,000x.
 The sum ($26,000x) of the maximum amounts computed above of capital gain dividends ($5,000x), distributions of qualified dividend income ($10,000x), short-term capital gain dividends ($5,000x), and interest-related dividends ($6,000x), exceeds the total amount distributed by R for the taxable year ($20,000x). If R uses these maximum amounts in making its dividend designations for the taxable year, the designations that are relevant for each of A and B will not exceed their respective dividend distributions. The reduced tax rate applicable to distributions of qualified dividend income, and thus the designation as such a distribution, apply to individual taxpayers who are United States persons and do not apply to income received by a nonresident alien individual unless the income is effectively connected with the conduct of a trade or business within the United States. In contrast, the exemption from United States withholding tax for interest-related dividends and short-term capital gain dividends received from a RIC applies only to dividends that are received by a non-resident alien individual and that are not effectively connected with the conduct of a trade or business within the United States.
 There is no indication that Congress, in enacting the exemption from United States withholding tax in the AJCA for interest-related dividends and short-term capital gain dividends received from a RIC by a nonresident alien individual, intended to reduce the benefits conferred by the JGTRRA for qualified dividend income received from the RIC by individuals who are United States persons. Similarly, there is no indication that Congress intended that the benefits conferred by the JGTRRA for qualified dividend income received from a RIC would apply to reduce the benefits conferred by the AJCA for interest-related dividends and short-term capital gains received from the RIC. To achieve the purposes of the provisions of both the AJCA and the JGTRRA, R may designate each of the maximum amounts described above, and A and B may apply different designations to their distributions.
 Therefore, with respect to its dividend distributions of $20,000x for the taxable year, R may designate $5,000x as a capital gain dividend, $10,000x as a distribution of qualified dividend income, $6,000x as an interest related dividend, and $5,000x as a short-term capital gain dividend. These are, respectively, 25 percent, 50 percent, 30 percent, and 25 percent of the $20,000x distribution. If R makes these designations and properly advises its shareholders that these percentages apply to the distributions that each received, then A and B may apply the designations as follows. Of the $20x received by A from R, A may treat 25 percent ($5x) as a capital gain dividend and 50 percent ($10x) as qualified dividend income that is subject to a maximum tax rate of 15 percent. The remaining $5x is reportable as dividend income that is not qualified dividend income. Of the $20x received by B from R, B may treat 25 percent ($5x) as a capital gain dividend, 30 percent ($6x) as an interest-related dividend, and 25 percent ($5x) as a short-term capital gain dividend. The remaining $4x is dividend income that is not qualified dividend income. Assuming all other necessary conditions are satisfied, the $5x of capital gain dividends, the $6x of interest-related dividends, and $5x of short-term capital gain dividends are exempt from United States withholding tax.
HOLDINGS
 (1) In making the dividend designations permitted by ss 852(b)(3)(C) and (b)(5)(A), 854(b)(1) and (2), and 871(k)(1)(C) and 2(C), a RIC may designate the maximum amount permitted under each provision even if the aggregate of all of the amounts so designated exceeds the total amount of the RIC’s dividend distributions.
 (2) Individual shareholders of the RIC who are United States persons may apply designations to the dividends they receive from the RIC that differ from designations applied by shareholders who are nonresident alien individuals.
DRAFTING INFORMATION
 The principal author of this revenue ruling is Sonja Kotlica of the Office of Associate Chief Counsel (Financial Institutions & Products). For further information regarding this revenue ruling, contact Ms. Kotlica at (202) 622- 3960 (not a toll-free call).
 Rev. Rul. 2005-31, 2005-21 I.R.B. 1084
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