# Bulletin No. 2023–49

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3Aa02ddfb2924fa4d2

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

HIGHLIGHTS
OF THIS ISSUE




Bulletin No. 2023–49
December 4, 2023

These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.

ADMINISTRATIVE
Rev. Rul. 2023-22, page 1301.

that maintain one or more DAFs, and to other persons
involved with the DAFs, including donors, donor-advisors,
related persons, and certain fund managers.

Interest rates: underpayments and overpayments. The rates
for interest determined under Section 6621 of the code for
the calendar quarter beginning January 1, 2024, will be 8
percent for overpayments (7 percent in the case of a corporation), 8 percent for underpayments, and 10 percent for
large corporate underpayments. The rate of interest paid on
the portion of a corporate overpayment exceeding $10,000
will be 5.5 percent.

EXEMPT ORGANIZATIONS

EMPLOYEE PLANS

EMPLOYEE PLANS

Notice 2023-76, page 1320.

REG-112916-23, page 1323.

This notice sets forth updates on the corporate bond
monthly yield curve, the corresponding spot segment rates
for November 2023 used under § 417(e)(3)(D), the 24-month
average segment rates applicable for November 2023, and
the 30-year Treasury rates, as reflected by the application of
§ 430(h)(2)(C)(iv).

EXCISE TAX, EXEMPT
ORGANIZATIONS
REG-142338-07, page 1363.

This document contains proposed regulations regarding
excise taxes on taxable distributions made by a sponsoring
organization from a donor advised fund (DAF), and on the
agreement of certain fund managers to the making of such
distributions. The proposed regulations provide guidance
regarding DAFs and taxable distributions. The proposed regulations generally apply to certain organizations, including
community foundations and other charitable organizations,

Finding Lists begin on page ii.

Announcement 2023-34, page 1385.

Revocation of IRC 501(c)(3) Organizations for failure to meet
the code section requirements. Contributions made to the
organizations by individual donors are no longer deductible
under IRC 170(b)(1)(A).

This document contains proposed regulations concerning
the statutory disallowance rule enacted by the SECURE 2.0
Act of 2022 to disallow a Federal income tax deduction for
a qualified conservation contribution made by a partnership
or an S corporation after December 29, 2022, if the amount
of the contribution exceeds 2.5 times the sum of each partner’s or S corporation shareholder’s relevant basis. The
proposed regulations would provide guidance regarding this
statutory disallowance rule, including definitions, appropriate methods to calculate the relevant basis of a partner or
an S corporation shareholder, the three statutory exceptions
to the statutory disallowance rule, and related reporting
requirements. In addition, the proposed regulations would
provide reporting requirements for partners and S corporation shareholders that receive a distributive share or pro
rata share of any noncash charitable contribution made by
a partnership or S corporation, regardless of whether the
contribution is a qualified conservation contribution (and
regardless of whether the contribution is of real property or
other noncash property)

REG-128276-12, page 1362.

The Department of the Treasury and the IRS are reopening the comment period for REG-128276-12, published in
the Federal Register on December 8, 2016, relating to the
determination and recognition of taxable income or loss and
foreign currency gain or loss with respect to a qualified business unit.

Rev. Rul. 2023-21, page 1299.

Federal rates; adjusted federal rates; adjusted federal
long-term rate, and the long-term tax exempt rate. For purposes of sections 382, 1274, 1288, 7872 and other sections of the Code, tables set forth the rates for December
2023.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and
enforce the law with integrity and fairness to all.

Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

December 4, 2023 

Bulletin No. 2023–49

Part I
Section 1274.—
Determination of Issue
Price in the Case of Certain
Debt Instruments Issued for
Property
Rev. Rul. 2023-21
This revenue ruling provides various
prescribed rates for federal income tax

AFR
110% AFR
120% AFR
130% AFR
AFR
110% AFR
120% AFR
130% AFR
150% AFR
175% AFR
AFR
110% AFR
120% AFR
130% AFR

Short-term adjusted AFR
Mid-term adjusted AFR
Long-term adjusted AFR

Bulletin No. 2023–49

purposes for December 2023 (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 shortterm, 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)(1) for buildings placed in service
during the current month. However, under
section 42(b)(2), the applicable percentage for non-federally subsidized new
buildings placed in service after July 30,
2008, shall not be less than 9%. 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. 2023-21 TABLE 1
Applicable Federal Rates (AFR) for December 2023
Period for Compounding
Annual
Semiannual
Quarterly
Short-term
5.26%
5.19%
5.16%
5.79%
5.71%
5.67%
6.33%
6.23%
6.18%
6.86%
6.75%
6.69%
Mid-term
4.82%
4.76%
4.73%
5.31%
5.24%
5.21%
5.79%
5.71%
5.67%
6.29%
6.19%
6.14%
7.27%
7.14%
7.08%
8.50%
8.33%
8.25%
Long-term
5.03%
4.97%
4.94%
5.54%
5.47%
5.43%
6.05%
5.96%
5.92%
6.56%
6.46%
6.41%

REV. RUL. 2023-21 TABLE 2
Adjusted AFR for December 2023
Period for Compounding
Annual
Semiannual
3.98%
3.94%
3.64%
3.61%
3.81%
3.77%

1299

Quarterly
3.92%
3.59%
3.75%

Monthly
5.13%
5.64%
6.15%
6.66%
4.71%
5.18%
5.64%
6.11%
7.04%
8.19%
4.92%
5.41%
5.89%
6.37%

Monthly
3.91%
3.58%
3.74%

December 4, 2023

REV. RUL. 2023-21 TABLE 3
Rates Under Section 382 for December 2023
Adjusted federal long-term rate for the current month
Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted federal
long-term rates for the current month and the prior two months.)

3.81%
3.81%

REV. RUL. 2023-21 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for December 2023
Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after
July 30, 2008, shall not be less than 9%.
Appropriate percentage for the 70% present value low-income housing credit
8.15%
Appropriate percentage for the 30% present value low-income housing credit
3.49%

REV. RUL. 2023-21 TABLE 5
Rate Under Section 7520 for December 2023
Applicable federal rate for determining the present value of an annuity, an interest for life or a term of years, or a
remainder or reversionary interest

Section 42.—Low-Income
Housing Credit
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month
of December 2023. See Rev. Rul. 2023-21,
page 1299.

Section 280G.—Golden
Parachute Payments
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
December 2023. See Rev. Rul. 2023-21, page 1299.

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 December 2023. See
Rev. Rul. 2023-21, page 1299.

December 4, 2023

Section 467.—Certain
Payments for the Use of
Property or Services
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
December 2023. See Rev. Rul. 2023-21, page 1299.

Section 468.—Special
Rules for Mining and Solid
Waste Reclamation and
Closing Costs
The applicable federal short-term rates are set
forth for the month of December 2023. See Rev.
Rul. 2023-21, page 1299.

Section 482.—Allocation
of Income and Deductions
Among Taxpayers
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
December 2023. See Rev. Rul. 2023-21, page 1299.

5.80%

Section 483.—Interest on
Certain Deferred Payments
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
December 2023. See Rev. Rul. 2023-21, page 1299.

Section 1288.—Treatment
of Original Issue Discount
on Tax-Exempt Obligations
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month of
December 2023. See Rev. Rul. 2023-21, page 1299.

Section 7520.—Valuation
Tables
The applicable federal mid-term rates are set
forth for the month of December 2023. See Rev.
Rul. 2023-21, page 1299.

Section 7872.—Treatment
of Loans With BelowMarket Interest Rates
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
December 2023. See Rev. Rul. 2023-21, page 1299.

1300

Bulletin No. 2023–49

Section 6621.—
Determination of Rate of
Interest
26 CFR 301.6621-1: Interest rate.

Rev. Rul. 2023-22
Section 6621 of the Internal Revenue
Code establishes the interest rates on
overpayments and underpayments of
tax. Under section 6621(a)(1), the overpayment rate is the sum of the federal
short-term rate plus 3 percentage points
(2 percentage points in the case of a corporation), except the rate for the portion of
a corporate overpayment of tax exceeding
$10,000 for a taxable period is the sum
of the federal short-term rate plus 0.5 of
a percentage point. Under section 6621(a)
(2), the underpayment rate is the sum of
the federal short-term rate plus 3 percentage points.
Section 6621(c) provides that for
purposes of interest payable under
section 6601 on any large corporate
underpayment, the underpayment rate
under section 6621(a)(2) is determined
by substituting “5 percentage points”
for “3 percentage points.” See section 6621(c) and section 301.6621-3
of the Regulations on Procedure and
Administration for the definition of a
large corporate underpayment and for
the rules for determining the applicable date. Section 6621(c) and section
301.6621-3 are generally effective for
periods after December 31, 1990.
Section 6621(b)(1) provides that the
Secretary will determine the federal
short-term rate for the first month in each

Bulletin No. 2023–49

calendar quarter. Section 6621(b)(2)(A)
provides that the federal short-term rate
determined under section 6621(b)(1) for
any month applies during the first calendar quarter beginning after that month.
Section 6621(b)(3) provides that the federal short-term rate for any month is the
federal short-term rate determined during
that month by the Secretary in accordance
with section 1274(d), rounded to the nearest full percent (or, if a multiple of 1/2 of
1 percent, the rate is increased to the next
highest full percent).
Notice 88-59, 1988-1 C.B. 546,
announced that in determining the quarterly interest rates to be used for overpayments and underpayments of tax
under section 6621, the Internal Revenue
Service will use the federal short-term rate
based on daily compounding because that
rate is most consistent with section 6621
which, pursuant to section 6622, is subject
to daily compounding.
The federal short-term rate determined
in accordance with section 1274(d) during
October 2023 is the rate published in
Revenue Ruling 2023-20, 2023-45 IRB
1221, to take effect beginning November
1, 2023. The federal short-term rate,
rounded to the nearest full percent, based
on daily compounding determined during
the month of October 2023 is 5 percent.
Accordingly, an overpayment rate of 8
percent (7 percent in the case of a corporation) and an underpayment rate of 8
percent are established for the calendar
quarter beginning January 1, 2024. The
overpayment rate for the portion of a corporate overpayment exceeding $10,000
for the calendar quarter beginning January
1, 2024, is 5.5 percent. The underpayment
rate for large corporate underpayments for
the calendar quarter beginning January 1,

1301

2024, is 10 percent. These rates apply to
amounts bearing interest during that calendar quarter.
Sections 6654(a)(1) and 6655(a)(1)
provide that the underpayment rate established under section 6621 applies in determining the addition to tax under sections
6654 and 6655 for failure to pay estimated tax for any taxable year. Thus, the
8 percent rate also applies to estimated tax
underpayments for the first calendar quarter beginning January 1, 2024. Pursuant
to section 6621(b)(2)(B), in determining
the addition to tax under section 6654 for
any taxable year for an individual, the
federal short-term rate that applies during
the third month following the taxable year
also applies during the first 15 days of the
fourth month following the taxable year.
In addition, pursuant to section 6603(d)
(4), the rate of interest on section 6603
deposits is 5 percent for the first calendar
quarter in 2024.
Interest factors for daily compound
interest for annual rates of 5.5 percent, 7
percent, 8 percent and 10 percent are published in Tables 64, 67, 69 and 73 of Rev.
Proc. 95-17, 1995-1 C.B. 618, 621, 623,
and 627.
Annual interest rates to be compounded
daily pursuant to section 6622 that apply
for prior periods are set forth in the tables
accompanying this revenue ruling.
DRAFTING INFORMATION
The principal author of this revenue
ruling is Casey R. Conrad of the Office of
the Associate Chief Counsel (Procedure
and Administration). For further information regarding this revenue ruling, contact
Mr. Conrad at (202) 317-6844 (not a tollfree number).

December 4, 2023

APPENDIX A

Days
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21

Factor
0.000013699
0.000027397
0.000041096
0.000054796
0.000068495
0.000082195
0.000095894
0.000109594
0.000123294
0.000136995
0.000150695
0.000164396
0.000178097
0.000191798
0.000205499
0.000219201
0.000232902
0.000246604
0.000260306
0.000274008
0.000287711

365 Day Year
0.5% Compound Rate 184 Days
Days
Factor
63
0.000863380
64
0.000877091
65
0.000890801
66
0.000904512
67
0.000918223
68
0.000931934
69
0.000945646
70
0.000959357
71
0.000973069
72
0.000986781
73
0.001000493
74
0.001014206
75
0.001027918
76
0.001041631
77
0.001055344
78
0.001069057
79
0.001082770
80
0.001096484
81
0.001110197
82
0.001123911
83
0.001137625

22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41

0.000301413
0.000315116
0.000328819
0.000342522
0.000356225
0.000369929
0.000383633
0.000397336
0.000411041
0.000424745
0.000438449
0.000452154
0.000465859
0.000479564
0.000493269
0.000506974
0.000520680
0.000534386
0.000548092
0.000561798

84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103

December 4, 2023

0.001151339
0.001165054
0.001178768
0.001192483
0.001206198
0.001219913
0.001233629
0.001247344
0.001261060
0.001274776
0.001288492
0.001302208
0.001315925
0.001329641
0.001343358
0.001357075
0.001370792
0.001384510
0.001398227
0.001411945

1302

Days
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145

Factor
0.001713784
0.001727506
0.001741228
0.001754951
0.001768673
0.001782396
0.001796119
0.001809843
0.001823566
0.001837290
0.001851013
0.001864737
0.001878462
0.001892186
0.001905910
0.001919635
0.001933360
0.001947085
0.001960811
0.001974536
0.001988262

146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165

0.002001988
0.002015714
0.002029440
0.002043166
0.002056893
0.002070620
0.002084347
0.002098074
0.002111801
0.002125529
0.002139257
0.002152985
0.002166713
0.002180441
0.002194169
0.002207898
0.002221627
0.002235356
0.002249085
0.002262815

Bulletin No. 2023–49

42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62

0.000575504
0.000589211
0.000602917
0.000616624
0.000630331
0.000644039
0.000657746
0.000671454
0.000685161
0.000698869
0.000712578
0.000726286
0.000739995
0.000753703
0.000767412
0.000781121
0.000794831
0.000808540
0.000822250
0.000835960
0.000849670

Bulletin No. 2023–49

104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124

0.001425663
0.001439381
0.001453100
0.001466818
0.001480537
0.001494256
0.001507975
0.001521694
0.001535414
0.001549133
0.001562853
0.001576573
0.001590293
0.001604014
0.001617734
0.001631455
0.001645176
0.001658897
0.001672619
0.001686340
0.001700062

1303

166
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184

0.002276544
0.002290274
0.002304004
0.002317734
0.002331465
0.002345195
0.002358926
0.002372657
0.002386388
0.002400120
0.002413851
0.002427583
0.002441315
0.002455047
0.002468779
0.002482511
0.002496244
0.002509977
0.002523710

December 4, 2023

Days
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21

Factor
0.000013661
0.000027323
0.000040984
0.000054646
0.000068308
0.000081970
0.000095632
0.000109295
0.000122958
0.000136620
0.000150283
0.000163947
0.000177610
0.000191274
0.000204938
0.000218602
0.000232266
0.000245930
0.000259595
0.000273260
0.000286924

366 Day Year
0.5% Compound Rate 184 Days
Days
Factor
63
0.000861020
64
0.000874693
65
0.000888366
66
0.000902040
67
0.000915713
68
0.000929387
69
0.000943061
70
0.000956735
71
0.000970409
72
0.000984084
73
0.000997758
74
0.001011433
75
0.001025108
76
0.001038783
77
0.001052459
78
0.001066134
79
0.001079810
80
0.001093486
81
0.001107162
82
0.001120839
83
0.001134515

22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42

0.000300590
0.000314255
0.000327920
0.000341586
0.000355252
0.000368918
0.000382584
0.000396251
0.000409917
0.000423584
0.000437251
0.000450918
0.000464586
0.000478253
0.000491921
0.000505589
0.000519257
0.000532925
0.000546594
0.000560262
0.000573931

84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104

December 4, 2023

0.001148192
0.001161869
0.001175546
0.001189223
0.001202900
0.001216578
0.001230256
0.001243934
0.001257612
0.001271291
0.001284969
0.001298648
0.001312327
0.001326006
0.001339685
0.001353365
0.001367044
0.001380724
0.001394404
0.001408085
0.001421765

1304

Days
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145

Factor
0.001709097
0.001722782
0.001736467
0.001750152
0.001763837
0.001777522
0.001791208
0.001804893
0.001818579
0.001832265
0.001845951
0.001859638
0.001873324
0.001887011
0.001900698
0.001914385
0.001928073
0.001941760
0.001955448
0.001969136
0.001982824

146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166

0.001996512
0.002010201
0.002023889
0.002037578
0.002051267
0.002064957
0.002078646
0.002092336
0.002106025
0.002119715
0.002133405
0.002147096
0.002160786
0.002174477
0.002188168
0.002201859
0.002215550
0.002229242
0.002242933
0.002256625
0.002270317

Bulletin No. 2023–49

43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62

0.000587600
0.000601269
0.000614939
0.000628608
0.000642278
0.000655948
0.000669618
0.000683289
0.000696959
0.000710630
0.000724301
0.000737972
0.000751643
0.000765315
0.000778986
0.000792658
0.000806330
0.000820003
0.000833675
0.000847348

Bulletin No. 2023–49

105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124

0.001435446
0.001449127
0.001462808
0.001476489
0.001490170
0.001503852
0.001517533
0.001531215
0.001544897
0.001558580
0.001572262
0.001585945
0.001599628
0.001613311
0.001626994
0.001640678
0.001654361
0.001668045
0.001681729
0.001695413

1305

167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184

0.002284010
0.002297702
0.002311395
0.002325087
0.002338780
0.002352473
0.002366167
0.002379860
0.002393554
0.002407248
0.002420942
0.002434636
0.002448331
0.002462025
0.002475720
0.002489415
0.002503110
0.002516806

December 4, 2023

TABLE OF INTEREST RATES
PERIODS BEFORE JUL. 1, 1975 - PERIODS ENDING DEC. 31, 1986
OVERPAYMENTS AND UNDERPAYMENTS
PERIOD

RATE

Before Jul. 1, 1975
Jul. 1, 1975–Jan. 31, 1976
Feb. 1, 1976–Jan. 31, 1978
Feb. 1, 1978–Jan. 31, 1980
Feb. 1, 1980–Jan. 31, 1982
Feb. 1, 1982–Dec. 31, 1982
Jan. 1, 1983–Jun. 30, 1983
Jul. 1, 1983–Dec. 31, 1983
Jan. 1, 1984–Jun. 30, 1984
Jul. 1, 1984–Dec. 31, 1984
Jan. 1, 1985–Dec. 31, 1985
Jul. 1, 1985–Dec. 31, 1985
Jan. 1, 1986–Jun. 30, 1986
Jul. 1, 1986–Dec. 31, 1986

6%
9%
7%
6%
12%
20%
16%
11%
11%
11%
13%
11%
10%
9%

In 1995-1 C.B.
DAILY RATE TABLE
2,
pg.
4,
pg.
3,
pg.
2,
pg.
5,
pg.
6,
pg.
37,
pg.
27,
pg.
75,
pg.
75,
pg.
31,
pg.
27,
pg.
25,
pg.
23,
pg.

Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
Table
Table

557
559
558
557
560
560
591
581
629
629
585
581
579
577

TABLE OF INTEREST RATES
FROM JAN. 1, 1987 – Dec. 31, 1998

Jan. 1, 1987–Mar. 31, 1987
Apr. 1, 1987–Jun. 30, 1987
Jul. 1, 1987–Sep. 30, 1987
Oct. 1, 1987–Dec. 31, 1987
Jan. 1, 1988–Mar. 31, 1988
Apr. 1, 1988–Jun. 30, 1988
Jul. 1, 1988–Sep. 30, 1988
Oct. 1, 1988–Dec. 31, 1988
Jan. 1, 1989–Mar. 31, 1989
Apr. 1, 1989–Jun. 30, 1989
Jul. 1, 1989–Sep. 30, 1989
Oct. 1, 1989–Dec. 31, 1989
Jan. 1, 1990–Mar. 31, 1990
Apr. 1, 1990–Jun. 30, 1990
Jul. 1, 1990–Sep. 30, 1990
Oct. 1, 1990–Dec. 31, 1990
Jan. 1, 1991–Mar. 31, 1991
Apr. 1, 1991–Jun. 30, 1991

RATE
8%
8%
8%
9%
10%
9%
9%
10%
10%
11%
11%
10%
10%
10%
10%
10%
10%
9%

Jul. 1, 1991–Sep. 30, 1991

9%

December 4, 2023

OVERPAYMENTS
1995-1 C.B.
TABLE
PG
21
575
21
575
21
575
23
577
73
627
71
625
71
625
73
627
25
579
27
581
27
581
25
579
25
579
25
579
25
579
25
579
25
579
23
577
23

1306

577

UNDERPAYMENTS
1995-1 C.B. RATE
RATE
TABLE
PG
9%
23
577
9%
23
577
9%
23
577
10%
25
579
11%
75
629
10%
73
627
10%
73
627
11%
75
629
11%
27
581
12%
29
583
12%
29
583
11%
27
581
11%
27
581
11%
27
581
11%
27
581
11%
27
581
11%
27
581
10%
25
579
10%

25

579

Bulletin No. 2023–49

Oct. 1, 1991–Dec. 31, 1991
Jan. 1, 1992–Mar. 31, 1992
Apr. 1, 1992–Jun. 30, 1992
Jul. 1, 1992–Sep. 30, 1992
Oct. 1, 1992–Dec. 31, 1992
Jan. 1, 1993–Mar. 31, 1993
Apr. 1, 1993–Jun. 30, 1993
Jul. 1, 1993–Sep. 30, 1993
Oct. 1, 1993–Dec. 31, 1993
Jan. 1, 1994–Mar. 31, 1994
Apr. 1, 1994–Jun. 30, 1994
Jul. 1, 1994–Sep. 30, 1994
Oct. 1, 1994–Dec. 31, 1994
Jan. 1, 1995–Mar. 31, 1995
Apr. 1, 1995–Jun. 30, 1995
Jul. 1, 1995–Sep. 30, 1995
Oct. 1, 1995–Dec. 31, 1995
Jan. 1, 1996–Mar. 31, 1996
Apr. 1, 1996–Jun. 30, 1996
Jul. 1, 1996–Sep. 30, 1996
Oct. 1, 1996–Dec. 31, 1996
Jan. 1, 1997–Mar. 31, 1997
Apr. 1, 1997–Jun. 30, 1997
Jul. 1, 1997–Sep. 30, 1997
Oct. 1, 1997–Dec. 31, 1997
Jan. 1, 1998–Mar. 31, 1998
Apr. 1, 1998–Jun. 30, 1998
Jul. 1, 1998–Sep. 30, 1998
Oct. 1, 1998–Dec. 31, 1998

Bulletin No. 2023–49

9%
8%
7%
7%
6%
6%
6%
6%
6%
6%
6%
7%
8%
8%
9%
8%
8%
8%
7%
8%
8%
8%
8%
8%
8%
8%
7%
7%
7%

23
69
67
67
65
17
17
17
17
17
17
19
21
21
23
21
21
69
67
69
69
21
21
21
21
21
19
19
19

1307

577
623
621
621
619
571
571
571
571
571
571
573
575
575
577
575
575
623
621
623
623
575
575
575
575
575
573
573
573

10%
9%
8%
8%
7%
7%
7%
7%
7%
7%
7%
8%
9%
9%
10%
9%
9%
9%
8%
9%
9%
9%
9%
9%
9%
9%
8%
8%
8%

25
71
69
69
67
19
19
19
19
19
19
21
23
23
25
23
23
71
69
71
71
23
23
23
23
23
21
21
21

579
625
623
623
621
573
573
573
573
573
573
575
577
577
579
577
577
625
623
625
625
577
577
577
577
577
575
575
575

December 4, 2023

TABLE OF INTEREST RATES
FROM JANUARY 1, 1999 - PRESENT
NONCORPORATE OVERPAYMENTS AND UNDERPAYMENTS
1995-1 C.B.
Jan. 1, 1999–Mar. 31, 1999
Apr. 1, 1999–Jun. 30, 1999
Jul. 1, 1999–Sep. 30, 1999
Oct. 1, 1999–Dec. 31, 1999
Jan. 1, 2000–Mar. 31, 2000
Apr. 1, 2000–Jun. 30, 2000
Jul. 1, 2000–Sep. 30, 2000
Oct. 1, 2000–Dec. 31, 2000
Jan. 1, 2001–Mar. 31, 2001
Apr. 1, 2001–Jun. 30, 2001
Jul. 1, 2001–Sep. 30, 2001
Oct. 1, 2001–Dec. 31, 2001
Jan. 1, 2002–Mar. 31, 2002
Apr. 1, 2002–Jun. 30, 2002
Jul. 1, 2002–Sep. 30, 2002
Oct. 1, 2002–Dec. 31, 2002
Jan. 1, 2003–Mar. 31, 2003
Apr. 1, 2003–Jun. 30, 2003
Jul. 1, 2003–Sep. 30, 2003
Oct. 1, 2003–Dec. 31, 2003
Jan. 1, 2004–Mar. 31, 2004
Apr. 1, 2004–Jun. 30, 2004
Jul. 1, 2004–Sep. 30, 2004
Oct. 1, 2004–Dec. 31, 2004
Jan. 1, 2005–Mar. 31, 2005
Apr. 1, 2005–Jun. 30, 2005
Jul. 1, 2005–Sep. 30, 2005
Oct. 1, 2005–Dec. 31, 2005
Jan. 1, 2006–Mar. 31, 2006
Apr. 1, 2006–Jun. 30, 2006
Jul. 1, 2006–Sep. 30, 2006
Oct. 1, 2006–Dec. 31, 2006
Jan. 1, 2007–Mar. 31, 2007

RATE
7%
8%
8%
8%
8%
9%
9%
9%
9%
8%
7%
7%
6%
6%
6%
6%
5%
5%
5%
4%
4%
5%
4%
5%
5%
6%
6%
7%
7%
7%
8%
8%
8%

Apr. 1, 2007–Jun. 30, 2007
Jul. 1, 2007–Sep. 30, 2007
Oct. 1, 2007–Dec. 31, 2007
Jan. 1, 2008–Mar. 31, 2008
Apr. 1, 2008–Jun. 30, 2008
Jul. 1, 2008–Sep. 30, 2008
Oct. 1, 2008–Dec. 31, 2008
Jan. 1, 2009–Mar. 31, 2009

8%
8%
8%
7%
6%
5%
6%
5%

December 4, 2023

1308

TABLE
19
21
21
21
69
71
71
71
23
21
19
19
17
17
17
17
15
15
15
13
61
63
61
63
15
17
17
19
19
19
21
21

PAGE
573
575
575
575
623
625
625
625
577
575
573
573
571
571
571
571
569
569
569
567
615
617
615
617
569
571
571
573
573
573
575
575

21
21
21
21
67
65
63
65
15

575
575
575
575
621
619
617
619
569

Bulletin No. 2023–49

Apr. 1, 2009–Jun. 30, 2009
Jul. 1, 2009–Sep. 30, 2009
Oct. 1, 2009–Dec. 31, 2009
Jan. 1, 2010–Mar. 31, 2010
Apr. 1, 2010–Jun. 30, 2010
Jul. 1, 2010–Sep. 30, 2010
Oct. 1, 2010–Dec. 31, 2010
Jan. 1, 2011–Mar. 31, 2011
Apr. 1, 2011–Jun. 30, 2011
Jul. 1, 2011–Sep. 30, 2011
Oct. 1, 2011–Dec. 31, 2011
Jan. 1, 2012–Mar. 31, 2012
Apr. 1, 2012–Jun. 30, 2012
Jul. 1, 2012–Sep. 30, 2012
Oct. 1, 2012–Dec. 31, 2012
Jan. 1, 2013–Mar. 31, 2013
Apr. 1, 2013–Jun. 30, 2013
Jul. 1, 2013–Sep. 30, 2013
Oct. 1, 2013–Dec. 31, 2013
Jan. 1, 2014–Mar. 31, 2014
Apr. 1, 2014–Jun. 30, 2014
Jul. 1, 2014–Sep. 30, 2014
Oct. 1, 2014–Dec. 31, 2014
Jan. 1, 2015–Mar. 31, 2015
Apr. 1, 2015–Jun. 30, 2015
Jul. 1, 2015–Sep. 30, 2015
Oct. 1, 2015–Dec. 31, 2015
Jan. 1, 2016–Mar. 31, 2016
Apr. 1, 2016–Jun. 30, 2016
Jul. 1, 2016–Sep. 30, 2016
Oct. 1, 2016–Dec. 31, 2016
Jan. 1, 2017–Mar. 31, 2017
Apr. 1, 2017–Jun. 30, 2017
Jul. 1, 2017–Sep. 30, 2017

4%
4%
4%
4%
4%
4%
4%
3%
4%
4%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
4%
4%
4%
4%
4%
4%

Oct. 1, 2017–Dec. 31, 2017
Jan. 1, 2018–Mar. 31, 2018
Apr. 1, 2018–Jun. 30, 2018
Jul. 1, 2018–Sep. 30, 2018
Oct. 1, 2018–Dec. 31, 2018
Jan. 1, 2019–Mar. 31, 2019
Apr. 1, 2019–Jun. 30, 2019
Jul. 1, 2019–Sep. 30, 2019
Oct. 1, 2019–Dec. 31, 2019
Jan. 1, 2020–Mar. 31, 2020
Apr. 1, 2020–Jun. 30, 2020

4%
4%
5%
5%
5%
6%
6%
5%
5%
5%
5%

Bulletin No. 2023–49

1309

13
13
13
13
13
13
13
11
13
13
11
59
59
59
59
11
11
11
11
11
11
11
11
11
11
11
11
59
61
61
61
13
13

567
567
567
567
567
567
567
565
567
567
565
613
613
613
613
565
565
565
565
565
565
565
565
565
565
565
565
613
615
615
615
567
567

13
13
13
15
15
15
17
17
15
15
63
63

567
567
567
569
569
569
571
571
569
569
617
617

December 4, 2023

Jul. 1, 2020–Sep. 30, 2020
Oct. 1, 2020–Dec. 31, 2020
Jan. 1, 2021–Mar. 31, 2021
Apr. 1, 2021–Jun. 30, 2021
Jul. 1, 2021–Sep. 30, 2021
Oct. 1, 2021–Dec. 31, 2021
Jan. 1, 2022–Mar. 31, 2022
Apr. 1, 2022–Jun. 30, 2022
Jul. 1, 2022–Sep. 30, 2022
Oct. 1, 2022–Dec. 31, 2022
Jan. 1, 2023–Mar. 31, 2023
Apr. 1, 2023–Jun. 30, 2023
Jul. 1, 2023–Sep. 30, 2023
Oct. 1, 2023–Dec. 31, 2023
Jan. 1, 2024–Mar. 31, 2024

3%
3%
3%
3%
3%
3%
3%
4%
5%
6%
7%
7%
7%
8%
8%

December 4, 2023

1310

59
59
11
11
11
11
11
13
15
17
19
19
19
21
69

613
613
565
565
565
565
565
567
569
571
573
573
573
575
623

Bulletin No. 2023–49

TABLE OF INTEREST RATES
FROM JANUARY 1, 1999 - PRESENT
CORPORATE OVERPAYMENTS AND UNDERPAYMENTS

Jan. 1, 1999–Mar. 31, 1999
Apr. 1, 1999–Jun. 30, 1999
Jul. 1, 1999–Sep. 30, 1999
Oct. 1, 1999–Dec. 31, 1999
Jan. 1, 2000–Mar. 30, 2000
Apr. 1, 2000–Jun. 30, 2000
Jul. 1, 2000–Sep. 30, 2000
Oct. 1, 2000–Dec. 31, 2000
Jan. 1, 2001–Mar. 31, 2001
Apr. 1, 2001–Jun. 30, 2001
Jul. 1, 2001–Sep. 30, 2001
Oct. 1, 2001–Dec. 31, 2001
Jan. 1, 2002–Mar. 31, 2002
Apr. 1, 2002–Jun. 30, 2002
Jul. 1, 2002–Sep. 30, 2002
Oct. 1, 2002–Dec. 31, 2002
Jan. 1, 2003–Mar. 31, 2003
Apr. 1, 2003–Jun. 30, 2003

OVERPAYMENTS
1995-1 C.B.
RATE
TABLE
6%
17
7%
19
7%
19
7%
19
7%
67
8%
69
8%
69
8%
69
8%
21
7%
19
6%
17
6%
17
5%
15
5%
15
5%
15
5%
15
4%
13
4%
13

PG
571
573
573
573
621
623
623
623
575
573
571
571
569
569
569
569
567
567

UNDERPAYMENTS
1995-1 C.B.
RATE
TABLE
PG
7%
19
573
8%
21
575
8%
21
575
8%
21
575
8%
69
623
9%
71
625
9%
71
625
9%
71
625
9%
23
577
8%
21
575
7%
19
573
7%
19
573
6%
17
571
6%
17
571
6%
17
571
6%
17
571
5%
15
569
5%
15
569

Jul. 1, 2003–Sep. 30, 2003
Oct. 1, 2003–Dec. 31, 2003
Jan. 1, 2004–Mar. 31, 2004
Apr. 1, 2004–Jun. 30, 2004
Jul. 1, 2004–Sep. 30, 2004
Oct. 1, 2004–Dec. 31, 2004
Jan. 1, 2005–Mar. 31, 2005
Apr. 1, 2005–Jun. 30, 2005
Jul. 1, 2005–Sep. 30, 2005
Oct. 1, 2005–Dec. 31, 2005
Jan. 1, 2006–Mar. 31, 2006
Apr. 1, 2006–Jun. 30, 2006
Jul. 1, 2006–Sep. 30, 2006
Oct. 1, 2006–Dec. 31, 2006
Jan. 1, 2007–Mar. 31, 2007
Apr. 1, 2007–Jun. 30, 2007
Jul. 1, 2007–Sep. 30, 2007
Oct. 1, 2007–Dec. 31, 2007
Jan. 1, 2008–Mar. 31, 2008
Apr. 1, 2008–Jun. 30, 2008
Jul. 1, 2008–Sep. 30, 2008
Oct. 1, 2008–Dec. 31, 2008

4%
3%
3%
4%
3%
4%
4%
5%
5%
6%
6%
6%
7%
7%
7%
7%
7%
7%
6%
5%
4%
5%

567
565
613
615
613
615
567
569
569
571
571
571
573
573
573
573
573
573
619
617
615
617

5%
4%
4%
5%
4%
5%
5%
6%
6%
7%
7%
7%
8%
8%
8%
8%
8%
8%
7%
6%
5%
6%

Bulletin No. 2023–49

13
11
59
61
59
61
13
15
15
17
17
17
19
19
19
19
19
19
65
63
61
63

1311

15
13
61
63
61
63
15
17
17
19
19
19
21
21
21
21
21
21
67
65
63
65

569
567
615
617
615
617
569
571
571
573
573
573
575
575
575
575
575
575
621
619
617
619

December 4, 2023

Jan. 1, 2009–Mar. 31, 2009
Apr. 1, 2009–Jun. 30, 2009
Jul. 1, 2009–Sep. 30, 2009
Oct. 1, 2009–Dec. 31, 2009
Jan. 1, 2010–Mar. 31, 2010
Apr. 1, 2010–Jun. 30, 2010
Jul. 1, 2010–Sep. 30, 2010
Oct. 1, 2010–Dec. 31, 2010
Jan. 1, 2011–Mar. 31, 2011
Apr. 1, 2011–Jun. 30, 2011
Jul. 1, 2011–Sep. 30, 2011
Oct. 1, 2011–Dec. 31, 2011
Jan. 1, 2012–Mar. 31, 2012
Apr. 1, 2012–Jun. 30, 2012
Jul. 1, 2012–Sep. 30, 2012
Oct. 1, 2012–Dec. 31, 2012
Jan. 1, 2013–Mar. 31, 2013
Apr. 1, 2013–Jun. 30, 2013
Jul. 1, 2013–Sep. 30, 2013
Oct. 1, 2013–Dec. 31, 2013
Jan. 1, 2014–Mar. 31, 2014
Apr. 1, 2014–Jun. 30, 2014
Jul. 1, 2014–Sep. 30, 2014
Oct. 1, 2014–Dec. 31, 2014
Jan. 1, 2015–Mar. 31, 2015
Apr. 1, 2015–Jun. 30, 2015
Jul. 1, 2015–Sep. 30, 2015
Oct. 1, 2015–Dec. 31, 2015
Jan. 1, 2016–Mar. 31, 2016
Apr. 1, 2016–Jun. 30, 2016
Jul. 1, 2016–Sep. 30, 2016
Oct. 1, 2016–Dec. 31, 2016
Jan. 1, 2017–Mar. 31, 2017
Apr. 1, 2017–Jun. 30, 2017
Jul. 1, 2017–Sep. 30, 2017
Oct. 1, 2017–Dec. 31, 2017
Jan. 1, 2018–Mar. 31, 2018
Apr. 1, 2018–Jun. 30, 2018
Jul. 1, 2018–Sep. 30, 2018
Oct. 1, 2018–Dec. 31, 2018
Jan. 1, 2019–Mar. 31, 2019
Apr. 1, 2019–Jun. 30, 2019
Jul. 1, 2019–Sep. 30, 2019
Oct. 1, 2019–Dec. 31, 2019
Jan. 1, 2020–Mar. 31, 2020

December 4, 2023

4%
3%
3%
3%
3%
3%
3%
3%
2%
3%
3%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
2%
3%
3%
3%
3%
3%
3%
3%
3%
4%
4%
4%
5%
5%
4%
4%
4%

13
11
11
11
11
11
11
11
9
11
11
9
57
57
57
57
9
9
9
9
9
9
9
9
9
9
9
9
57
59
59
59
11
11
11
11
11
13
13
13
15
15
13
13
61

1312

567
565
565
565
565
565
565
565
563
565
565
563
611
611
611
611
563
563
563
563
563
563
563
563
563
563
563
563
611
613
613
613
565
565
565
565
565
567
567
567
569
569
567
567
615

5%
4%
4%
4%
4%
4%
4%
4%
3%
4%
4%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
3%
4%
4%
4%
4%
4%
4%
4%
4%
5%
5%
5%
6%
6%
5%
5%
5%

15
13
13
13
13
13
13
13
11
13
13
11
59
59
59
59
11
11
11
11
11
11
11
11
11
11
11
11
59
61
61
61
13
13
13
13
13
15
15
15
17
17
15
15
63

569
567
567
567
567
567
567
567
565
567
567
565
613
613
613
613
565
565
565
565
565
565
565
565
565
565
565
565
613
615
615
615
567
567
567
567
567
569
569
569
571
571
569
569
617

Bulletin No. 2023–49

Apr. 1, 2020–Jun. 30, 2020
Jul. 1, 2020–Sep. 30, 2020
Oct. 1, 2020–Dec. 31, 2020
Jan. 1, 2021–Mar. 31, 2021
Apr. 1, 2021–Jun. 30, 2021
Jul. 1, 2021–Sep. 30, 2021
Oct. 1, 2021–Dec. 31, 2021
Jan. 1, 2022–Mar. 31, 2022
Apr. 1, 2022–Jun. 30, 2022
Jul. 1, 2022–Sep. 30, 2022
Oct. 1, 2022–Dec. 31, 2022
Jan. 1, 2023–Mar. 31, 2023
Apr. 1, 2023–Jun. 30, 2023
Jul. 1, 2023–Sep. 30, 2023
Oct. 1, 2023–Dec. 31, 2023
Jan. 1, 2024–Mar. 31, 2024

Bulletin No. 2023–49

4%
2%
2%
2%
2%
2%
2%
2%
3%
4%
5%
6%
6%
6%
7%
7%

61
57
57
9
9
9
9
9
11
13
15
17
17
17
19
67

1313

615
611
611
563
563
563
563
563
565
567
569
571
571
571
573
621

5%
3%
3%
3%
3%
3%
3%
3%
4%
5%
6%
7%
7%
7%
8%
8%

63
59
59
11
11
11
11
11
13
15
17
19
19
19
21
69

617
613
613
565
565
565
565
565
567
569
571
573
573
573
575
623

December 4, 2023

TABLE OF INTEREST RATES
FOR LARGE CORPORATE UNDERPAYMENTS
FROM JANUARY 1, 1991 - PRESENT

Jan. 1, 1991–Mar. 31, 1991
Apr. 1, 1991–Jun. 30, 1991
Jul. 1, 1991–Sep. 30, 1991
Oct. 1, 1991–Dec. 31, 1991
Jan. 1, 1992–Mar. 31, 1992
Apr. 1, 1992–Jun. 30, 1992
Jul. 1, 1992–Sep. 30, 1992
Oct. 1, 1992–Dec. 31, 1992
Jan. 1, 1993–Mar. 31, 1993
Apr. 1, 1993–Jun. 30, 1993
Jul. 1, 1993–Sep. 30, 1993
Oct. 1, 1993–Dec. 31, 1993
Jan. 1, 1994–Mar. 31, 1994
Apr. 1, 1994–Jun. 30, 1994
Jul. 1, 1994–Sep. 30, 1994
Oct. 1, 1994–Dec. 31, 1994
Jan. 1, 1995–Jun. 30, 1995
Apr. 1, 1995–Jun. 30, 1995
Jul. 1, 1995–Sep. 30, 1995
Oct. 1, 1995–Dec. 31, 1995
Jan. 1, 1996–Mar. 31, 1996
Apr. 1, 1996–Jun. 30, 1996
Jul. 1, 1996–Sep. 30, 1996
Oct. 1, 1996–Dec. 31, 1996
Jan. 1, 1997–Mar. 31, 1997
Apr. 1, 1997–Jun. 30, 1997
Jul. 1, 1997–Sep. 30, 1997
Oct. 1, 1997–Dec. 31, 1997
Jan. 1, 1998–Mar. 31, 1998
Apr. 1, 1998–Jun. 30, 1998
Jul. 1, 1998–Sep. 30, 1998
Oct. 1, 1998–Dec. 31, 1998
Jan. 1, 1999–Mar. 31, 1999

RATE
13%
12%
12%
12%
11%
10%
10%
9%
9%
9%
9%
9%
9%
9%
10%
11%
11%
12%
11%
11%
11%
10%
11%
11%
11%
11%
11%
11%
11%
10%
10%
10%
9%

Apr. 1, 1999–Jun. 30, 1999
Jul. 1, 1999–Sep. 30, 1999
Oct. 1, 1999–Dec. 31, 1999
Jan. 1, 2000–Mar. 31, 2000
Apr. 1, 2000–Jun. 30, 2000
Jul. 1, 2000–Sep. 30, 2000
Oct. 1, 2000–Dec. 31, 2000
Jan. 1, 2001–Mar. 31, 2001

10%
10%
10%
10%
11%
11%
11%
11%

December 4, 2023

1314

1995-1 C.B.
TABLE
31
29
29
29
75
73
73
71
23
23
23
23
23
23
25
27
27
29
27
27
75
73
75
75
27
27
27
27
27
25
25
25

PG
585
583
583
583
629
627
627
625
577
577
577
577
577
577
579
581
581
583
581
581
629
627
629
629
581
581
581
581
581
579
579
579

23
25
25
25
73
75
75
75
27

577
579
579
579
627
629
629
629
581

Bulletin No. 2023–49

Apr. 1, 2001–Jun. 30, 2001
Jul. 1, 2001–Sep. 30, 2001
Oct. 1, 2001–Dec. 31, 2001
Jan. 1, 2002–Mar. 31, 2002
Apr. 1, 2002–Sep. 30, 2002
Jul. 1, 2002–Sep. 30, 2002
Oct. 1, 2002–Dec. 31, 2002
Jan. 1, 2003–Mar. 31, 2003
Apr. 1, 2003–Jun. 30, 2003
Jul. 1, 2003–Sep. 30, 2003
Oct. 1, 2003–Dec. 31, 2003
Jan. 1, 2004–Mar. 31, 2004
Apr. 1, 2004–Jun. 30, 2004
Jul. 1, 2004–Sep. 30, 2004
Oct. 1, 2004–Dec. 31, 2004
Jan. 1, 2005–Mar. 31, 2005
Apr. 1, 2005–Jun. 30, 2005
Jul. 1, 2005–Sep. 30, 2005
Oct. 1, 2005–Dec. 31, 2005
Jan. 1, 2006–Mar. 31, 2006
Apr. 1, 2006–Jun. 30, 2006
Jul. 1, 2006–Sep. 30, 2006
Oct. 1, 2006–Dec. 31, 2006
Jan. 1, 2007–Mar. 31, 2007
Apr. 1, 2007–Jun. 30, 2007
Jul. 1, 2007–Sep. 30, 2007
Oct. 1, 2007–Dec. 31, 2007
Jan. 1, 2008–Mar. 31, 2008
Apr. 1, 2008–Sep. 30, 2008
Jul. 1, 2008–Sep. 30, 2008
Oct. 1, 2008–Dec. 31, 2008
Jan. 1, 2009–Mar. 31, 2009
Apr. 1, 2009–Jun. 30, 2009
Jul. 1, 2009–Sep. 30, 2009

10%
9%
9%
8%
8%
8%
8%
7%
7%
7%
6%
6%
7%
6%
7%
7%
8%
8%
9%
9%
9%
10%
10%
10%
10%
10%
10%
9%
8%
7%
8%
7%
6%
6%

Oct. 1, 2009–Dec. 31, 2009
Jan. 1, 2010–Mar. 31, 2010
Apr. 1, 2010–Jun. 30, 2010
Jul. 1, 2010–Sep. 30, 2010
Oct. 1, 2010–Dec. 31, 2010
Jan. 1, 2011-Mar. 31, 2011
Apr. 1, 2011–Jun. 30, 2011
Jul. 1, 2011–Sep. 30, 2011
Oct. 1, 2011–Dec. 31, 2011
Jan. 1, 2012–Mar. 31, 2012
Apr. 1, 2012–Jun. 30, 2012
Jul. 1, 2012–Sep. 30, 2012

6%
6%
6%
6%
6%
5%
6%
6%
5%
5%
5%
5%

Bulletin No. 2023–49

1315

25
23
23
21
21
21
21
19
19
19
17
65
67
65
67
19
21
21
23
23
23
25
25
25
25
25
25
71
69
67
69
19
17

579
577
577
575
575
575
575
573
573
573
571
619
621
619
621
573
575
575
577
577
577
579
579
579
579
579
579
625
623
621
623
573
571

17
17
17
17
17
17
15
17
17
15
63
63
63

571
571
571
571
571
571
569
571
571
569
617
617
617

December 4, 2023

Oct. 1, 2012–Dec. 31, 2012
Jan. 1, 2013–Mar. 31, 2013
Apr. 1, 2013–Jun. 30, 2013
Jul. 1, 2013–Sep. 30, 2013
Oct. 1, 2013–Dec. 31, 2013
Jan. 1, 2014–Mar. 31, 2014
Apr. 1, 2014–Jun. 30, 2014
Jul. 1, 2014–Sep. 30, 2014
Oct. 1, 2014–Dec. 31, 2014
Jan. 1, 2015–Mar. 31, 2015
Apr. 1, 2015–Jun. 30, 2015
Jul. 1, 2015–Sep. 30, 2015
Oct. 1, 2015–Dec. 31, 2015
Jan. 1, 2016–Mar. 31, 2016
Apr. 1, 2016–Jun. 30, 2016
Jul. 1, 2016–Sep. 30, 2016
Oct. 1, 2016–Dec. 31, 2016
Jan. 1, 2017–Mar. 31, 2017
Apr. 1, 2017–Jun. 30, 2017
Jul. 1, 2017–Sep. 30, 2017
Oct. 1, 2017–Dec. 31, 2017
Jan. 1, 2018–Mar. 31, 2018
Apr. 1, 2018–Jun. 30, 2018
Jul. 1, 2018–Sep. 30, 2018
Oct. 1, 2018–Dec. 31, 2018
Jan. 1, 2019–Mar. 31, 2019
Apr. 1, 2019–Jun. 30, 2019
Jul. 1, 2019–Sep. 30, 2019
Oct. 1, 2019–Dec. 31, 2019
Jan. 1, 2020–Mar. 31, 2020
Apr. 1, 2020–Jun. 30, 2020
Jul. 1, 2020–Sep. 30, 2020
Oct. 1, 2020–Dec. 31, 2020
Jan. 1, 2021–Mar. 31, 2021

5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
5%
6%
6%
6%
6%
6%
6%
6%
6%
7%
7%
7%
8%
8%
7%
7%
7%
7%
5%
5%
5%

Apr. 1, 2021–Jun. 30, 2021
Jul. 1, 2021–Sep. 30, 2021
Oct. 1, 2021–Dec. 31, 2021
Jan. 1, 2022–Mar. 31, 2022
Apr. 1, 2022–Jun. 30, 2022
Jul. 1, 2022–Sep. 30, 2022
Oct. 1, 2022–Dec. 31, 2022
Jan. 1, 2023–Mar. 31, 2023
Apr. 1, 2023-Jun. 30, 2023
Jul. 1, 2023–Sep. 30, 2023
Oct. 1, 2023–Dec. 31, 2023
Jan. 1, 2024–Mar. 31, 2024

5%
5%
5%
5%
6%
7%
8%
9%
9%
9%
10%
10%

December 4, 2023

1316

63
15
15
15
15
15
15
15
15
15
15
15
15
63
65
65
65
17
17
17
17
17
19
19
19
21
21
19
19
67
67
63
63

617
569
569
569
569
569
569
569
569
569
569
569
569
617
619
619
619
571
571
571
571
571
573
573
573
575
575
573
573
621
621
617
617

15
15
15
15
15
17
19
21
23
23
23
25
73

569
569
569
569
569
571
573
575
577
577
577
579
627

Bulletin No. 2023–49

TABLE OF INTEREST RATES FOR CORPORATE
OVERPAYMENTS EXCEEDING $10,000
FROM JANUARY 1, 1995 – PRESENT
1995-1 C.B.
RATE

TABLE

PG

Jan. 1, 1995–Mar. 31, 1995

6.5%

18

572

Apr. 1, 1995–Jun. 30, 1995

7.5%

20

574

Jul. 1, 1995–Sep. 30, 1995

6.5%

18

572

Oct. 1, 1995–Dec. 31, 1995

6.5%

18

572

Jan. 1, 1996–Mar. 31, 1996

6.5%

66

620

Apr. 1, 1996–Jun. 30, 1996

5.5%

64

618

Jul. 1, 1996–Sep. 30, 1996

6.5%

66

620

Oct. 1, 1996–Dec. 31, 1996

6.5%

66

620

Jan. 1, 1997–Mar. 31, 1997

6.5%

18

572

Apr. 1, 1997–Jun. 30, 1997

6.5%

18

572

Jul. 1, 1997–Sep. 30, 1997

6.5%

18

572

Oct. 1, 1997–Dec. 31, 1997

6.5%

18

572

Jan. 1, 1998–Mar. 31, 1998

6.5%

18

572

Apr. 1, 1998–Jun. 30, 1998

5.5%

16

570

Jul. 1, 1998–Sep. 30, 1998

5.5%

16

570

Oct. 1, 1998–Dec. 31, 1998

5.5%

16

570

Jan. 1, 1999–Mar. 31, 1999

4.5%

14

568

Apr. 1, 1999–Sep. 30, 1999

5.5%

16

570

Jul. 1, 1999–Sep. 30, 1999

5.5%

16

570

Oct. 1, 1999–Dec. 31, 1999

5.5%

16

570

Jan. 1, 2000–Mar. 31, 2000

5.5%

64

618

Apr. 1, 2000–Jun. 30, 2000

6.5%

66

620

Jul. 1, 2000–Sep. 30, 2000

6.5%

66

620

Oct. 1, 2000–Dec. 31, 2000

6.5%

66

620

Jan. 1, 2001–Mar. 31, 2001

6.5%

18

572

Apr. 1, 2001–Jun. 30, 2001

5.5%

16

570

Jul. 1, 2001–Sep. 30, 2001

4.5%

14

568

Oct. 1, 2001–Dec. 31, 2001

4.5%

14

568

Jan. 1, 2002–Mar. 31, 2002

3.5%

12

566

Apr. 1, 2002–Jun. 30, 2002

3.5%

12

566

Jul. 1, 2002–Sep. 30, 2002

3.5%

12

566

Oct. 1, 2002–Dec. 31, 2002

3.5%

12

566

Jan. 1, 2003–Mar. 31, 2003

2.5%

10

564

Apr. 1, 2003–Jun. 30, 2003

2.5%

10

564

Jul. 1, 2003–Sep. 30, 2003

2.5%

10

564

Oct. 1, 2003–Dec. 31, 2003

1.5%

8

562

Jan. 1, 2004–Mar. 31, 2004

1.5%

56

610

Apr. 1, 2004–Jun. 30, 2004

2.5%

58

612

Bulletin No. 2023–49

1317

December 4, 2023

Jul. 1, 2004–Sep. 30, 2004

1.5%

56

610

Oct. 1, 2004–Dec. 31, 2004

2.5%

58

612

Jan. 1, 2005–Mar. 31, 2005

2.5%

10

564

Apr. 1, 2005–Jun. 30, 2005

3.5%

12

566

Jul. 1, 2005–Sep. 30, 2005

3.5%

12

566

Oct. 1, 2005–Dec. 31, 2005

4.5%

14

568

Jan. 1, 2006–Mar. 31, 2006

4.5%

14

568

Apr. 1, 2006–Jun. 30, 2006

4.5%

14

568

Jul. 1, 2006–Sep. 30, 2006

5.5%

16

570

Oct. 1, 2006–Dec. 31, 2006

5.5%

16

570

Jan. 1, 2007–Mar. 31, 2007

5.5%

16

570

Apr. 1, 2007–Jun. 30, 2007

5.5%

16

570

Jul. 1, 2007–Sep. 30, 2007

5.5%

16

570

Oct. 1, 2007–Dec. 31, 2007

5.5%

16

570

Jan. 1, 2008–Mar. 31, 2008

4.5%

62

616

Apr. 1, 2008–Jun. 30, 2008

3.5%

60

614

Jul. 1, 2008–Sep. 30, 2008

2.5%

58

612

Oct. 1, 2008–Dec. 31, 2008

3.5%

60

614

Jan. 1, 2009–Mar. 31, 2009

2.5%

10

564

Apr. 1, 2009–Jun. 30, 2009

1.5%

8

562

Jul. 1, 2009–Sep. 30, 2009

1.5%

8

562

Oct. 1, 2009–Dec. 31, 2009

1.5%

8

562

Jan. 1, 2010–Mar. 31, 2010

1.5%

8

562

Apr. 1, 2010–Jun. 30, 2010

1.5%

8

562

Jul. 1, 2010–Sep. 30, 2010

1.5%

8

562

Oct. 1, 2010–Dec. 31, 2010

1.5%

8

562

Jan. 1, 2011–Mar. 31, 2011

0.5%*

Apr. 1, 2011–Jun. 30, 2011

1.5%

8

562

Jul. 1, 2011–Sep. 30, 2011

1.5%

8

562

Oct. 1, 2011–Dec. 31, 2011

0.5%*

Jan. 1, 2012–Mar. 31, 2012

0.5%*

Apr. 1, 2012–Jun. 30, 2012

0.5%*

Jul. 1, 2012–Sep. 30, 2012

0.5%*

Oct. 1, 2012–Dec. 31, 2012

0.5%*

Jan. 1, 2013–Mar. 31, 2013

0.5%*

Apr. 1, 2013–Jun. 30, 2013

0.5%*

Jul. 1, 2013–Sep. 30, 2013

0.5%*

Oct. 1, 2013–Dec. 31, 2013

0.5%*

Jan. 1, 2014–Mar. 31, 2014

0.5%*

Apr. 1, 2014–Jun. 30, 2014

0.5%*

Jul. 1, 2014–Sep. 30, 2014

0.5%*

Oct. 1, 2014–Dec. 31, 2014

0.5%*

December 4, 2023

1318

Bulletin No. 2023–49

Jan. 1, 2015–Mar. 31, 2015

0.5%*

Apr. 1, 2015–Jun. 30, 2015

0.5%*

Jul. 1, 2015–Sep. 30, 2015

0.5%*

Oct. 1, 2015–Dec. 31, 2015

0.5%*

Jan. 1, 2016–Mar. 31, 2016

0.5%*

Apr. 1, 2016–Jun. 30, 2016

1.5%

56

610

Jul. 1, 2016–Sep. 30, 2016

1.5%

56

610

Oct. 1, 2016–Dec. 31, 2016

1.5%

56

610

Jan. 1, 2017–Mar. 31, 2017

1.5%

8

562

Apr. 1, 2017–Jun. 30, 2017

1.5%

8

562

Jul. 1, 2017–Sep. 30, 2017

1.5%

8

562

Oct. 1, 2017–Dec. 31, 2017

1.5%

8

562

Jan. 1, 2018–Mar. 31, 2018

1.5%

8

562

Apr. 1, 2018–Jun. 30, 2018

2.5%

10

564

Jul. 1, 2018–Sep. 30, 2018

2.5%

10

564

Oct. 1, 2018–Dec. 31, 2018

2.5%

10

564

Jan. 1, 2019–Mar. 31, 2019

3.5%

12

566

Apr. 1, 2019–Jun. 30, 2019

3.5%

12

566

Jul. 1, 2019–Sep. 30, 2019

2.5%

10

564

Oct. 1, 2019–Dec. 31, 2019

2.5%

10

564

Jan. 1, 2020–Mar. 31, 2020

2.5%

58

612

Apr. 1, 2020–Jun. 30, 2020

2.5%

58

612

Jul. 1, 2020–Sep. 30, 2020

0.5%*

Oct. 1, 2020–Dec. 31, 2020

0.5%*

Jan. 1, 2021–Mar. 31, 2021

0.5%*

Apr. 1, 2021–Jun. 30, 2021

0.5%*

Jul. 1, 2021–Sep. 30, 2021

0.5%*

Oct. 1, 2021–Dec. 31, 2021

0.5%*

Jan. 1, 2022–Mar. 31, 2022

0.5%*

Apr. 1, 2022–Jun. 30, 2022

1.5%

8

562

Jul. 1, 2022–Sep. 30, 2022

2.5%

10

564

Oct. 1, 2022–Dec. 31, 2022

3.5%

12

566

Jan. 1, 2023–Mar. 31, 2023

4.5%

14

568

Apr. 1, 2023–Jun. 30, 2023

4.5%

14

568

Jul. 1, 2023–Sep. 30, 2023

4.5%

14

568

Oct. 1, 2023–Dec. 31, 2023

5.5%

16

570

Jan. 1, 2024–Mar. 31, 2024

5.5%

64

618

* The asterisk reflects the interest factors for daily compound interest for annual rates of 0.5 percent published in Appendix A of
this Revenue Ruling.

Bulletin No. 2023–49

1319

December 4, 2023

Part III
Update for Weighted
Average Interest Rates,
Yield Curves, and Segment
Rates
Notice 2023-76
This notice provides guidance on the
corporate bond monthly yield curve, the
corresponding spot segment rates used
under § 417(e)(3), and the 24-month average segment rates under § 430(h)(2) of the
Internal Revenue Code. In addition, this
notice provides guidance as to the interest rate on 30-year Treasury securities
under § 417(e)(3)(A)(ii)(II) as in effect for
plan years beginning before 2008 and the
30-year Treasury weighted average rate
under § 431(c)(6)(E)(ii)(I).
YIELD CURVE AND SEGMENT
RATES
Section 430 specifies the minimum
funding requirements that apply to single-employer plans (except for CSEC plans

Applicable Month
November 2023

under § 414(y)) pursuant to § 412. Section
430(h)(2) specifies the interest rates that
must be used to determine a plan’s target
normal cost and funding target. Under
this provision, present value is generally
determined using three 24-month average
interest rates (“segment rates”), each of
which applies to cash flows during specified periods. To the extent provided under
§ 430(h)(2)(C)(iv), these segment rates
are adjusted by the applicable percentage
of the 25-year average segment rates for
the period ending September 30 of the
year preceding the calendar year in which
the plan year begins.1 However, an election may be made under § 430(h)(2)(D)
(ii) to use the monthly yield curve in place
of the segment rates.
Notice 2007-81, 2007-44 I.R.B. 899,
provides guidelines for determining the
monthly corporate bond yield curve, and
the 24-month average corporate bond segment rates used to compute the target normal cost and the funding target. Consistent
with the methodology specified in Notice
2007-81, the monthly corporate bond yield
curve derived from October 2023 data is
in Table 2023-10 at the end of this notice.

The spot first, second, and third segment
rates for the month of October 2023 are,
respectively, 5.77, 6.14, and 6.19.
The 24-month average segment rates
determined under § 430(h)(2)(C)(i) through
(iii) must be adjusted pursuant to § 430(h)
(2)(C)(iv) to be within the applicable minimum and maximum percentages of the corresponding 25-year average segment rates.
For this purpose, any 25-year average segment rate that is less than 5% is deemed to
be 5%. The 25-year average segment rates
for plan years beginning in 2022, 2023 and
2024 were published in Notice 2021-54,
2021-41 I.R.B. 457, Notice 2022-40, 202240 I.R.B. 266, and Notice 2023-66, 202340 I.R.B. 992, respectively. The applicable
minimum and maximum percentages are
95% and 105% for plan years beginning in
2022, 2023 and 2024.
24-MONTH AVERAGE CORPORATE
BOND SEGMENT RATES
The three 24-month average corporate
bond segment rates applicable for November
2023 without adjustment for the 25-year
average segment rate limits are as follows:

24-Month Average Segment Rates Without 25-Year Average Adjustment
First Segment
Second Segment
4.02
4.73

The adjusted 24-month average segment
rates set forth in the chart below reflect §
430(h)(2)(C)(iv) of the Code. The 24-month

averages applicable for November 2023,
adjusted to be within the applicable minimum and maximum percentages of the

Third Segment
4.75

corresponding 25-year average segment
rates in accordance with § 430(h)(2)(C)(iv)
of the Code, are as follows:

Adjusted 24-Month Average Segment Rates
For Plan Years
Beginning In

Applicable Month

First Segment

Second Segment

Third Segment

2022

November 2023

4.75

5.18

5.92

2023

November 2023

4.75

5.00

5.74

2024

November 2023

4.75

4.87

5.59

30-YEAR TREASURY SECURITIES
INTEREST RATES
Section 431 specifies the minimum
funding requirements that apply to

multiemployer plans pursuant to § 412.
Section 431(c)(6)(B) specifies a minimum amount for the full-funding limitation described in § 431(c)(6)(A), based on
the plan’s current liability. Section 431(c)

(6)(E)(ii)(I) provides that the interest rate
used to calculate current liability for this
purpose must be no more than 5 percent
above and no more than 10 percent below
the weighted average of the rates of interest

Pursuant to § 433(h)(3)(A), the third segment rate determined under § 430(h)(2)(C) is used to determine the current liability of a CSEC plan (which is used to calculate the minimum amount
of the full funding limitation under § 433(c)(7)(C)).
1

December 4, 2023

1320

Bulletin No. 2023–49

on 30-year Treasury securities during the
four-year period ending on the last day
before the beginning of the plan year.
Notice 88-73, 1988-2 C.B. 383, provides
guidelines for determining the weighted
average interest rate. The rate of interest

on 30-year Treasury securities for October
2023 is 4.94 percent. The Service determined this rate as the average of the daily
determinations of yield on the 30-year
Treasury bond maturing in August 2053.
For plan years beginning in November

For Plan Years Beginning In

Treasury Weighted Average Rates
30-Year Treasury Weighted Average

Permissible Range 90% to 105%

November 2023

3.00

2.70 to 3.15

under § 417(e)(3)(D) are segment rates
computed without regard to a 24-month
average. Notice 2007-81 provides guidelines for determining the minimum

present value segment rates. Pursuant to
that notice, the minimum present value
segment rates determined for October
2023 are as follows:

MINIMUM PRESENT VALUE
SEGMENT RATES
In general, the applicable interest rates

Month
October 2023

Minimum Present Value Segment Rates
First Segment
Second Segment
5.77
6.14

DRAFTING INFORMATION
The principal author of this notice is
Tom Morgan of the Office of Associate

Bulletin No. 2023–49

2023, the weighted average of the rates
of interest on 30-year Treasury securities
and the permissible range of rates used to
calculate current liability are as follows:

Chief Counsel (Employee Benefits,
Exempt Organizations, and Employment
Taxes). However, other personnel from
the IRS participated in the development

1321

Third Segment
6.19

of this guidance. For further information
regarding this notice, contact Mr. Morgan
at 202-317-6700 or Tony Montanaro at
626-927-1475 (not toll-free numbers).

December 4, 2023

Table 2023-10
Monthly Yield Curve for October 2023
Derived from September 2023 Data
Maturity
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
10.5
11.0
11.5
12.0
12.5
13.0
13.5
14.0
14.5
15.0
15.5
16.0
16.5
17.0
17.5
18.0
18.5
19.0
19.5
20.0

Yield
5.86
5.83
5.80
5.78
5.75
5.74
5.73
5.73
5.74
5.76
5.78
5.81
5.85
5.89
5.93
5.97
6.01
6.05
6.08
6.11
6.14
6.16
6.19
6.20
6.22
6.23
6.24
6.25
6.26
6.26
6.26
6.26
6.26
6.26
6.26
6.26
6.25
6.25
6.25
6.24

December 4, 2023

Maturity
20.5
21.0
21.5
22.0
22.5
23.0
23.5
24.0
24.5
25.0
25.5
26.0
26.5
27.0
27.5
28.0
28.5
29.0
29.5
30.0
30.5
31.0
31.5
32.0
32.5
33.0
33.5
34.0
34.5
35.0
35.5
36.0
36.5
37.0
37.5
38.0
38.5
39.0
39.5
40.0

Yield
6.24
6.24
6.23
6.23
6.23
6.22
6.22
6.22
6.21
6.21
6.21
6.21
6.21
6.20
6.20
6.20
6.20
6.20
6.20
6.20
6.19
6.19
6.19
6.19
6.19
6.19
6.19
6.19
6.19
6.19
6.19
6.19
6.18
6.18
6.18
6.18
6.18
6.18
6.18
6.18

Maturity
40.5
41.0
41.5
42.0
42.5
43.0
43.5
44.0
44.5
45.0
45.5
46.0
46.5
47.0
47.5
48.0
48.5
49.0
49.5
50.0
50.5
51.0
51.5
52.0
52.5
53.0
53.5
54.0
54.5
55.0
55.5
56.0
56.5
57.0
57.5
58.0
58.5
59.0
59.5
60.0

Yield
6.18
6.18
6.18
6.18
6.18
6.18
6.18
6.18
6.18
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.17
6.16
6.16
6.16

1322

Maturity
60.5
61.0
61.5
62.0
62.5
63.0
63.5
64.0
64.5
65.0
65.5
66.0
66.5
67.0
67.5
68.0
68.5
69.0
69.5
70.0
70.5
71.0
71.5
72.0
72.5
73.0
73.5
74.0
74.5
75.0
75.5
76.0
76.5
77.0
77.5
78.0
78.5
79.0
79.5
80.0

Yield
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16

Maturity
80.5
81.0
81.5
82.0
82.5
83.0
83.5
84.0
84.5
85.0
85.5
86.0
86.5
87.0
87.5
88.0
88.5
89.0
89.5
90.0
90.5
91.0
91.5
92.0
92.5
93.0
93.5
94.0
94.5
95.0
95.5
96.0
96.5
97.0
97.5
98.0
98.5
99.0
99.5
100.0

Yield
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.16
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15
6.15

Bulletin No. 2023–49

Part IV
Notice of Proposed
Rulemaking
Statutory Disallowance
of Deductions for Certain
Qualified Conservation
Contributions Made
by Partnerships and S
Corporations
REG-112916-23
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking and notice of public hearing.
SUMMARY: This document contains
proposed regulations concerning the statutory disallowance rule enacted by the
SECURE 2.0 Act of 2022 to disallow a
Federal income tax deduction for a qualified conservation contribution made by
a partnership or an S corporation after
December 29, 2022, if the amount of the
contribution exceeds 2.5 times the sum of
each partner’s or S corporation shareholder’s relevant basis. The proposed regulations would provide guidance regarding
this statutory disallowance rule, including
definitions, appropriate methods to calculate the relevant basis of a partner or
an S corporation shareholder, the three
statutory exceptions to the statutory disallowance rule, and related reporting
requirements. In addition, the proposed
regulations would provide reporting
requirements for partners and S corporation shareholders that receive a distributive share or pro rata share of any
noncash charitable contribution made by
a partnership or S corporation, regardless
of whether the contribution is a qualified
conservation contribution (and regardless of whether the contribution is of
real property or other noncash property).
These proposed regulations would affect
partnerships and S corporations that claim
qualified conservation contributions, and
partners and S corporation shareholders

Bulletin No. 2023–49

that receive a distributive share or pro rata
share, as applicable, of a noncash charitable contribution. This document also provides a notice of public hearing on these
proposed regulations.
DATES: Written or electronic comments
must be received by December 20, 2023.
The public hearing on these proposed regulations is scheduled to be held on January
3, 2024, at 10 a.m. ET. Requests to speak
and outlines of topics to be discussed at
the public hearing must be received by
December 20, 2023. If no outlines are
received by December 20, 2023, the public hearing will be cancelled. Requests to
attend the public hearing must be received
by 5 p.m. on December 29, 2023. The
public hearing will be made accessible to
people with disabilities. Requests for special assistance during the hearing must be
received by 5 p.m. on December 28, 2023.
ADDRESSES: Commenters are strongly
encouraged to submit public comments
electronically. Submit electronic submissions via the Federal eRulemaking Portal
at https://www.regulations.gov (indicate
IRS and REG-112916-23) by following
the online instructions for submitting
comments. Once submitted to the Federal
eRulemaking Portal, comments cannot be
edited or withdrawn. The Department of
Treasury (Treasury Department) and the
IRS will publish for public availability
any comments submitted, whether electronically or on paper, to the IRS’s public docket. Requests for a public hearing
must be submitted as prescribed in the
“Comments and Public Hearing” section.
Send paper submissions to: CC:PA:01:PR
(REG-112916-23), Room 5203, Internal
Revenue Service, P.O. Box 7604, Ben
Franklin Station, Washington DC 20044.
FOR FURTHER INFORMATION
CONTACT: Concerning the proposed
regulations under §§1.170A-14, 1.706-3,
and 1.706-4, contact Benjamin Weaver
at (202) 317-6850 (not a toll-free number); concerning the proposed regulations
under §1.170A-16 and issues regarding
section 170 other than section 170(h)(7),

1323

contact Elizabeth Boone at (202) 3175100 and Hannah Kim at (202) 317-7003
(not toll-free numbers); and concerning
submissions of comments and requests for
a public hearing, contact Vivian Hayes at
(202) 317-6901 (not a toll-free number)
or by email to publichearings@irs.gov
(preferred).
SUPPLEMENTARY INFORMATION:
Background
I. Overview
This document contains proposed regulations that would amend the Income Tax
Regulations (26 CFR part 1) under sections 170 and 706 of the Internal Revenue
Code (Code) to implement the provisions
of section 605(a) and (b) of the SECURE
2.0 Act of 2022 (SECURE 2.0 Act),
enacted as Division T of the Consolidated
Appropriations Act, 2023, Public Law
117-328, 136 Stat. 4459, 5393 (December
29, 2022), which apply to contributions of
property made after December 29, 2022.
II. Charitable Contribution Deductions
Section 170(a) provides, subject to certain limitations and requirements, a deduction for any charitable contribution, as
defined in section 170(c), of cash or other
property the payment of which is made
within the taxable year. Section 170(f) disallows charitable contribution deductions
in certain cases and provides special rules.
Section 170(f)(3)(A) provides that, in
the case of a contribution (not made by a
transfer in trust) of an interest in property
that consists of less than the taxpayer’s
entire interest in such property, a deduction will be allowed only to the extent that
the value of the interest contributed would
be allowable as a deduction under section
170 if such interest had been transferred
in trust. Section 170(f)(3)(B)(iii) provides
that section 170(f)(3)(A) does not apply
to a qualified conservation contribution
(discussed in part III of this Background
section).
Section 170(f)(11) requires a qualified
appraisal and other documentation for a

December 4, 2023

charitable contribution deduction to be
allowed with respect to certain contributions of property. Section 170(f)(11) also
includes special rules for contributions of
property other than cash (noncash charitable contributions) of more than $5,000
and for noncash charitable contributions
of more than $500,000. In addition, section 170(f)(11)(H) provides that the
Secretary of the Treasury or her delegate
(Secretary) may prescribe such regulations as may be necessary or appropriate
to carry out the purposes of section 170(f)
(11). Section 6001 provides that every
person liable for any tax imposed by title
26, United States Code (title 26) must
keep such records, render such statements,
make such returns, and comply with such
rules and regulations as the Secretary may
from time to time prescribe. In addition,
section 6011 provides, in part, that, whenever required by regulations prescribed
by the Secretary, any person made liable
for any tax imposed by title 26 must make
a return or statement according to the
forms and regulations prescribed by the
Secretary and include therein the information required by such forms or regulations.
Under the authority of sections 170(f)(11)
(H), 6001, and 6011, existing regulations
under §1.170A-16 provide substantiation
and reporting requirements that must be
satisfied for a deduction to be allowed
under section 170 with respect to noncash
charitable contributions.
III. Qualified Conservation Contributions
Section 170(h)(1) provides that, in
general, for purposes of section 170(f)(3)
(B)(iii), the term “qualified conservation
contribution” means a contribution (1) of
a qualified real property interest, (2) to a
qualified organization, (3) exclusively for
conservation purposes. Section 170(h)
(2) defines the term “qualified real property interest,” section 170(h)(3) defines
the term “qualified organization,” section
170(h)(4) defines the term “conservation
purpose,” and section 170(h)(5) defines
the term “exclusively for conservation
purposes.” In general, a qualified conservation contribution may include a contribution of a conservation easement.
The existing regulations under
§1.170A-14 provide rules for qualified
conservation contributions described in

December 4, 2023

section 170(h). Consistent with section
170(f)(3), §1.170A-14(a) provides that a
deduction under section 170 generally is
not allowed for a charitable contribution
of any interest in property that consists
of less than the donor’s entire interest in
the property other than certain transfers in
trust. However, by reason of section 170(f)
(3)(B)(iii), a deduction may be allowed for
the value of a qualified conservation contribution if the requirements of §1.170A14 are met. To be eligible for a deduction
under §1.170A-14, the conservation purpose of the contribution must be protected
in perpetuity. See §1.170A-14(a) and (g).
IV. Syndicated Conservation Easement
Transactions
On December 23, 2016, the Treasury
Department and the IRS released Notice
2017-10, 2017-4 I.R.B. 544, which identified transactions that are the same as
or substantially similar to certain syndicated conservation easement transactions
as “listed transactions” under §1.6011-4
subject to certain disclosure and list maintenance requirements. Notice 2017-10
explains that the Treasury Department
and the IRS are aware that some promoters are syndicating conservation easement
transactions that purport to give investors
the opportunity to obtain charitable contribution deductions in amounts that significantly exceed the amounts invested. In
addition, Notice 2017-10 provides that a
transaction is a listed transaction if (1) an
investor receives promotional materials
that offer a prospective investor in a passthrough entity the possibility of a charitable contribution deduction that equals or
exceeds an amount that is 2.5 times the
amount of the investor’s investment, (2)
the investor purchases an interest directly
or indirectly (through one or more tiers of
pass-through entities) in the pass-through
entity that holds real property, (3) the
pass-through entity contributes a conservation easement and allocates, directly or
through one or more tiers of pass-through
entities, a charitable contribution to the
investor, and (4) the investor reports on
the investor’s Federal income tax return
a charitable contribution deduction with
respect to the conservation easement.
Congress continued to be concerned
about abusive syndicated conservation

1324

easement transactions even after Notice
2017-10 was issued, and the transactions
were the subject of an investigation by
the U.S. Senate Committee on Finance,
which issued a report on August 25,
2020. S. Committee on Finance, Comm.
Print 116-44, Syndicated ConservationEasement Transactions, 116th Cong., 2nd
Sess. (2020) (Committee Report). The
Committee Report found that the syndicated conservation easement transactions
examined were nothing more than retail
tax shelters allowing taxpayers to buy
tax deductions at the end of any given
tax year. Id. at 3. The Committee Report
further stated that these tax deductions
could be purchased with no economic
risk. Id. As such, the Finance Committee
concluded that further action was necessary to preserve the integrity of the conservation easement tax deduction despite
ongoing efforts to combat this abuse such
as the issuance of Notice 2017-10 and IRS
enforcement action. Id. at 4.
In a separate report accompanying
an earlier proposal for amending section 170(h), in legislation proposed as
the “Enhancing American Retirement
Now Act,” the Committee on Finance
recognized charitable deductions for the
donation of conservation easements as
an important tool and incentive to protect
the environment and historic structures.
S. Rep. No. 117-142 on S. 4808, at 218,
117th Cong., 2nd Sess. (2022). Citing its
findings from the 2020 Committee Report,
the Committee noted, however, that abusive tax shelter transactions put the conservation easement tax deduction at risk.
The Committee ultimately found it appropriate to take legislative action to protect
the integrity of the conservation easement
tax deduction for easement donations with
a legitimate conservation purpose. Id.
On December 8, 2022, the Treasury
Department and the IRS published in the
Federal Register (87 FR 75185) a notice
of proposed rulemaking (REG-10613422) identifying syndicated conservation
easement transactions and substantially
similar transactions as listed transactions
(listing NPRM). The definition of a syndicated conservation easement transaction in proposed §1.6011-9 of the
listing NPRM is similar to the definition
in Notice 2017-10. The purpose of the listing NPRM was to eliminate any confusion

Bulletin No. 2023–49

and ensure consistent enforcement of
Federal tax laws throughout the nation in
light of certain judicial decisions holding
that, under the Administrative Procedure
Act, 5 U.S.C. chapter 5, subchapter II,
listed transactions may be identified only
after following notice and comment procedures. See, e.g., Mann Construction,
Inc. v. United States, 27 F.4th 1138 (6th
Cir. 2022), and Green Valley Investors,
LLC, et al. v. Commissioner, 159 T.C. No.
5 (2022). The Treasury Department and
the IRS are in the process of considering
the comments received and finalizing the
listing NPRM.
V. Section 605 of the SECURE 2.0 Act
Section 170(h)(7) was added to the
Code by section 605(a)(1) of the SECURE
2.0 Act. Section 170(h)(7)(A) states that
a contribution by a partnership (whether
directly or as a distributive share of a contribution of another partnership) is not
treated as a qualified conservation contribution for purposes of section 170 if the
amount of such contribution exceeds 2.5
times the sum of each partner’s relevant
basis in such partnership (Disallowance
Rule). Thus, a contribution of a qualified real property interest to a qualified
organization exclusively for conservation
purposes is not a qualified conservation
contribution if the Disallowance Rule
applies. Section 170(h)(7)(F) provides
that the rules of section 170(h)(7) “apply
to S corporations and other pass-through
entities in the same manner as such rules
apply to partnerships” except as the
Secretary may otherwise provide.
Section 170(h)(7)(B) defines the terms
“relevant basis” and “modified basis,”
section 170(h)(7)(C), (D), and (E) provide three exceptions to the Disallowance
Rule, and section 170(h)(7)(G) provides
a specific grant of regulatory authority to
the Secretary to issue regulations or other
guidance as the Secretary determines
are necessary or appropriate to carry out
the purposes of the Disallowance Rule,
including reporting requirements and
rules to prevent the avoidance of the
Disallowance Rule.
Section 605(a)(2) of the SECURE 2.0
Act modifies certain penalty provisions in
sections 6662, 6664, and 6751 of the Code
to provide special rules for charitable

Bulletin No. 2023–49

contribution deductions disallowed by
section 170(h)(7). Section 605(a)(3) of
the SECURE 2.0 Act provides that any
charitable contribution for which a deduction was disallowed under section 170(h)
(7) is treated, for purposes of the period of
limitations on assessment and collection
of tax in section 6501 of the Code and the
period of limitations on making adjustments in section 6235 of the Code, as a
transaction specifically identified by the
Secretary as a tax-avoidance transaction.
Section 605(b) of the SECURE 2.0
Act added section 170(f)(19) to the
Code, which provides that, in the case
of a partnership or S corporation claiming a qualified conservation contribution
for the preservation of a building that is
a certified historic structure (as defined in
section 170(h)(4)(C)) in an amount that
exceeds 2.5 times the sum of each partner’s or S corporation shareholder’s relevant basis (as defined in section 170(h)
(7)), no deduction under section 170 is
allowed unless, as provided in section
170(f)(19)(A)(i) and (ii), the partnership
or S corporation includes on its return for
the taxable year a statement that such contribution was made and any other information as the Secretary may require. A
contribution to preserve a certified historic
structure is one of the three exceptions to
the Disallowance Rule.
Section 605(c) of the SECURE 2.0 Act
provides that the amendments made by
section 605 of the SECURE 2.0 Act apply
to contributions made after December 29,
2022, and that no inference is intended as
to the appropriate treatment of contributions made in taxable years ending on or
before that date, or as to any contribution
for which a deduction is not disallowed by
reason of section 170(h)(7).
VI. Overview of the Disallowance Rule
The Disallowance Rule provides that
a contribution by a partnership (whether
directly or as a distributive share of a contribution of another partnership) is not
treated as a qualified conservation contribution for purposes of section 170 if the
amount of such contribution exceeds 2.5
times the sum of each partner’s relevant
basis in such partnership. If such a contribution is not treated as a qualified conservation contribution, then the general rule

1325

under section 170(f)(3)(A) disallowing a
charitable contribution deduction under
section 170 for a contribution of a partial
interest in property applies. Thus, if the
Disallowance Rule applies, any amount of
deduction under section 170 for a qualified
conservation contribution is disallowed.
Section 170(h)(7)(B)(i) provides that,
for purposes of section 170(h)(7), the term
“relevant basis” means, with respect to
any partner, the portion of such partner’s
modified basis in the partnership that is
allocable (under rules similar to the rules
of section 755 of the Code for allocating
certain special basis adjustments to partnership property) to the portion of the
real property with respect to which the
contribution described in section 170(h)
(7)(A) is made. Section 170(h)(7)(B)
(ii) provides that, for purposes of section 170(h)(7), the term “modified basis”
means, with respect to any partner, such
partner’s adjusted basis in the partnership
as determined (1) immediately before the
contribution described in section 170(h)
(7)(A), (2) without regard to the treatment
of partnership liabilities in section 752,
and (3) by the partnership after taking into
account these first two adjustments and
such other adjustments as the Secretary
may provide.
Section 170(h)(7) contains three exceptions to the Disallowance Rule. First,
section 170(h)(7)(C) provides that the
Disallowance Rule does not apply to any
contribution made at least three years after
the latest of (1) the last date on which the
partnership that made such contribution
acquired any portion of the real property
with respect to which such contribution
is made, (2) the last date on which any
partner in the partnership that made such
contribution acquired any interest in such
partnership, and (3) if the interest in the
partnership that made such contribution is
held through one or more partnerships, the
last date on which any such partnership
acquired any interest in any other such
partnership, and the last date on which any
partner in any such partnership acquired
any interest in such partnership.
Second, section 170(h)(7)(D)(i) provides that the Disallowance Rule does not
apply to any contribution made by any partnership if substantially all of the partnership interests in such partnership are held,
directly or indirectly, by an individual and

December 4, 2023

members of the family of such individual.
Section 170(h)(7)(D)(ii) provides that, for
purposes of section 170(h)(7)(D), the term
“members of the family” means, with
respect to any individual (I) the spouse of
such individual, and (II) any individual
who bears a relationship to such individual that is described in section 152(d)(2)
(A) through (G) of the Code for purposes
of determining whether an individual is a
qualifying relative.
Third, section 170(h)(7)(E) provides
that the Disallowance Rule does not apply
to any qualified conservation contribution
the conservation purpose of which is the
preservation of any building that is a certified historic structure (as defined in section 170(h)(4)(C)).
Section 170(h)(7)(F) provides that,
except as may be otherwise provided by
the Secretary, the rules of section 170(h)
(7) apply to S corporations and other passthrough entities in the same manner as
such rules apply to partnerships.
Section 170(h)(7)(G) authorizes the
Secretary to prescribe such regulations
or other guidance as may be necessary or
appropriate to carry out the purposes of
section 170(h)(7), including regulations
or other guidance (1) to require reporting,
including reporting related to tiered partnerships and the modified basis of partners, and (2) to prevent the avoidance of
the purposes of section 170(h)(7).

These proposed regulations would provide specific rules for partnerships and
S corporations, but do not specifically
address other types of pass-through entities. The Treasury Department and the
IRS continue to study whether specific
rules are needed for other types of passthrough entities and request comments
on the application of section 170(f)(19)
and (h)(7) to pass-through entities other
than partnerships and S corporations. The
Treasury Department and the IRS intend
to issue future guidance on other issues
relating to section 605 of SECURE 2.0
Act, including additional guidance relating to the three statutory exceptions to the
Disallowance Rule.
Second, these proposed regulations
would make changes to the reporting
requirements in §1.170A-16 to address
substantiation of charitable contribution deductions as well as to implement
section 170(f)(19)(A)(i). The Treasury
Department and the IRS intend to issue
future guidance addressing section 170(f)
(19)(A)(ii).
Finally, these proposed regulations
propose new language in §§1.706-3 and
1.706-4 to facilitate the operation of the
Disallowance Rule in the case of a qualified conservation contribution made by a
partnership.

the Disallowance Rule to partnerships and
S corporations. Proposed §1.170A-14(j)
(3) would provide definitions. Consistent
with section 170(h)(7)(B), proposed
§1.170A-14(k) would provide that the
term “relevant basis” means, with respect
to any ultimate member (as defined in
proposed §1.170A-14(j)(3)(x)), the portion of such ultimate member’s modified basis (as determined under proposed
§1.170A-14(l)) that is allocable (under
the rules of proposed §1.170A-14(m))
to the portion of the real property with
respect to which the qualified conservation contribution is made. Proposed
§1.170A-14(l) would provide guidance
on the determination of modified basis.
Proposed §1.170A-14(m) would provide
guidance on the allocation of modified
basis to the portion of the real property
with respect to which the qualified conservation contribution was made. Proposed
§1.170A-14(m)(6) would impose recordkeeping requirements for substantiating
the computation of each ultimate member’s adjusted basis, modified basis, and
relevant basis by the due date, including
extensions, of the partnership’s or S corporation’s Federal income tax return.
Proposed §1.170A-14(n) would provide
guidance on the three statutory exceptions
to the Disallowance Rule.

II. Clarifying Change to §1.170A-14(a)

Explanation of Provisions

The second sentence of existing
§1.170A-14(a) provides that a deduction may be allowed under section 170(f)
(3)(B)(iii) for the value of a qualified
conservation contribution if the requirements of §1.170A-14 are met. Because
the Disallowance Rule provided in section 170(h)(7) is proposed to be contained
in §1.170A-14(j) through (n), proposed
§1.170A-14(a) would amend this sentence
to provide that a deduction may be allowed
under section 170(f)(3)(B)(iii) for the value
of a qualified conservation contribution if
the requirements of §1.170A-14 are met
and the contribution is not a disallowed
qualified conservation contribution within
the meaning of proposed §1.170A-14(j).

A. General Disallowance Rule for
Partnerships and S Corporations

I. Overview
These proposed regulations would
address several requirements added by
section 605 of the SECURE 2.0 Act and
make several related clarifying changes
to the existing regulations applicable to
qualified charitable contributions. First,
these proposed regulations would make
changes to existing §1.170A-14, including modifying paragraph (a) to reference
the Disallowance Rule and adding new
paragraphs (j) through (n) to §1.170A-14
to provide guidance on the application
of the Disallowance Rule to partnerships
and S corporations, the computation of
relevant basis and modified basis, including in tiered structures, and the three
statutory exceptions to the Disallowance
Rule.

December 4, 2023

III. Disallowance Rule and Its Exceptions
Proposed §1.170A-14(j) would provide
guidance on the general applicability of

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Consistent with section 170(h)(7)(A),
proposed §1.170A-14(j)(1) would provide
that proposed §1.170A-14(j) applies the
rules of section 170(h)(7), which disallow
a deduction under the Code and §1.170A14 for certain qualified conservation contributions, as defined in section 170(h)(1)
and §1.170A-14, made by, or allocated
to, partnerships or S corporations if the
amount of the qualified conservation contribution exceeds 2.5 times the sum of the
relevant bases, as determined by proposed
§1.170A-14(j) through (m). Proposed
§1.170A-14(j)(3)(vii) would define a contribution for which a deduction is disallowed by §1.170A-14(j) as a “disallowed
qualified conservation contribution.”
Proposed §1.170A-14(j)(2)(i) would provide that, except as provided in proposed
§1.170A-14(n), a qualified conservation
contribution by a contributing partnership

Bulletin No. 2023–49

or a contributing S corporation is a disallowed qualified conservation contribution
if the amount of the qualified conservation
contribution exceeds 2.5 times the sum of
each of the contributing partnership’s or
contributing S corporation’s ultimate member’s relevant basis as determined under
proposed §1.170A-14(j) through (m).
Proposed §1.170A-14(j)(2)(ii) would
provide that, except as provided in proposed §1.170A-14(n), an allocated portion
of a contribution received by an upper-tier
partnership or upper-tier S corporation
is a disallowed qualified conservation
contribution if either the contribution is
a disallowed qualified conservation contribution with respect to the partnership
that allocated the allocated portion to the
upper-tier partnership or upper-tier S corporation, or such allocated portion exceeds
2.5 times the sum of each of that uppertier partnership’s or upper-tier S corporation’s ultimate member’s relevant basis as
determined under proposed §1.170A-14(j)
through (m). Thus, if a contribution is a
disallowed qualified conservation contribution with respect to a partnership, then
the contribution is a disallowed qualified
conservation contribution with respect to
any upper-tier partnership or upper-tier
S corporation owning a direct or indirect
interest in that partnership. On the other
hand, if a contribution is not a disallowed
qualified conservation contribution with
respect to a partnership, then the rules of
proposed §1.170A-14(j) through (m) must
be applied to the next tier of upper-tier
partnerships and upper-tier S corporations
(which own a direct interest in the partnership) to determine if the Disallowance
Rule applies to those upper-tier partnerships and upper-tier S corporations. In
other words, the test of §1.170A-14(j)
through (m) must be applied at each tier
unless and until the test is failed at one
tier, in which case that portion of the contribution will be a disallowed qualified
conservation contribution to that tier and
any subsequent tiers.

“upper-tier partnership,” and “upper-tier S
corporation.”

B. Definitions

4. Contributing S corporation

Proposed §1.170A-14(j)(3) would
contain definitions, including definitions
of terms, including “contributing partnership,” “contributing S corporation,”
“ultimate member,” “allocated portion,”

Proposed
§1.170A-14(j)(3)(iv)
would provide that the term “contributing S corporation” means an S corporation that makes a qualified conservation
contribution.

Bulletin No. 2023–49

1. Allocated portion
Proposed §1.170A-14(j)(3)(i) would
provide that, in the case of an upper-tier
partnership or upper-tier S corporation that
receives, directly or indirectly, a distributive
share of a qualified conservation contribution, the phrase “allocated portion” means
the amount of such distributive share.
2. Amount of qualified conservation
contribution
Proposed §1.170A-14(j)(3)(ii) would
provide that the amount of a contributing
partnership’s or contributing S corporation’s qualified conservation contribution
is the amount claimed as a qualified conservation contribution on the return of the
contributing partnership or contributing S
corporation for the taxable year in which
the contribution is made. It would also
provide that, if the contributing partnership or contributing S corporation files an
amended return or administrative adjustment request under section 6227 of the
Code claiming a different amount with
respect to the qualified conservation contribution, the rules of §1.170A-14 must be
re-applied with respect to such different
amount to determine the application of
section 170(h)(7) and §1.170A-14.
3. Contributing partnership
The Disallowance Rule applies to a
partnership or S corporation that makes
a qualified conservation contribution,
as well as a partnership or S corporation
that is allocated a distributive share of a
qualified conservation contribution of
another partnership. For clarity, proposed
§1.170A-14(j)(3)(iii) would provide that
the term “contributing partnership” means
a partnership that makes a qualified conservation contribution.

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5. Direct interest
Proposed §1.170A-14(j)(3)(v) would
provide that the term “direct interest” refers
to an ownership interest in a contributing
partnership, upper-tier partnership, contributing S corporation, or upper-tier S
corporation that is held directly, or through
an entity disregarded as separate from its
owner for Federal income tax purposes,
a qualified subchapter S subsidiary as
defined in section 1361(b)(3) of the Code,
or through a grantor trust (under subpart
E of part 1 of subchapter J of chapter 1 of
the Code). In the case of a partner that is
a C corporation, non-grantor trust, or an
estate, or an S corporation shareholder that
is a non-grantor trust or an estate, the direct
interest in the partnership or S corporation, as applicable, would be considered to
be held by the C corporation, non-grantor
trust, or estate; the C corporation’s shareholders, trust beneficiaries, and estate beneficiaries would not be considered to hold
any interest in the partnership or S corporation, as applicable, for purposes of proposed §1.170A-14(j) through (n).
6. Directly
Proposed §1.170A-14(j)(3)(vi) would
provide that an ownership interest is held
“directly” if it is not held through one or
more upper-tier partnerships or upper-tier
S corporations. Similarly, a distributive
share or pro rata share of a qualified conservation contribution would be received
“directly” if it does not pass through one
or more upper-tier partnerships or uppertier S corporations.
7. Disallowed qualified conservation
contribution
Proposed §1.170A-14(j)(3)(vii) would
provide that the term “disallowed qualified conservation contribution” means
a qualified conservation contribution or
allocated portion for which no deduction
is allowed pursuant to section 170(h)(7)
and proposed §1.170A-14(j).
8. Indirect interest
Proposed §1.170A-14(j)(3)(viii) would
provide that the term “indirect interest” refers to an ownership interest in a

December 4, 2023

contributing partnership, contributing S
corporation, upper-tier partnership, or
upper-tier S corporation held through an
upper-tier S corporation or one or more
upper-tier partnerships.
9. Indirectly
Proposed §1.170A-14(j)(3)(ix) would
provide that an ownership interest is held
“indirectly” if it is held through one or
more upper-tier partnerships or upper-tier
S corporations. Similarly, a distributive
share or pro rata share of a qualified conservation contribution would be received
“indirectly” if it passes through one or
more upper-tier partnerships or upper-tier
S corporations.
10. Ultimate Member
Proposed §1.170A-14(j)(3)(x) would
provide that the term “ultimate member”
means, with respect to any partnership or
S corporation, any partner (that is not itself
a partnership or S corporation) or S corporation shareholder that receives a distributive share or pro rata share, directly
or indirectly, of a qualified conservation
contribution. Thus, ultimate members
would either be partners holding a direct
interest in a partnership, which may be
the contributing partnership or an uppertier partnership, or shareholders holding a
direct interest in an S corporation, which
may be the contributing S corporation
or an upper-tier S corporation. Proposed
§1.170A-14(j)(3)(x) would provide that
upper-tier S corporations and upper-tier
partnerships themselves are not considered ultimate members.
Several considerations played a role in
the decision of the Treasury Department
and the IRS to propose this rule that
looks to the relevant basis of the ultimate
members for determining whether a qualified conservation contribution will be
disallowed. Although section 170(h)(7)
(A) provides that the Disallowance Rule
applies in tiered structures, the statutory language does not explicitly explain
whether the determination of relevant
basis is made with respect to partners
(who may themselves be pass-through
entities) and S corporation shareholders
holding a direct interest in the contributing
partnership or contributing S corporation,

December 4, 2023

or whether the determination of relevant
basis is made with respect to the ultimate members. The Disallowance Rule is
meant to compare the amount of a claimed
qualified conservation contribution with
the equity investment made by those persons expected to claim a deduction with
respect to such contribution. Because it is
the ultimate members, such as individuals,
estates, and C corporations (that is, nonpass-through entities), who ultimately
claim a deduction for a qualified conservation contribution, the proposed regulations would require that the determination
of relevant basis be made with respect to
those ultimate partners and S corporation
shareholders. For example, assume a contributing partnership has two partners: (1)
an upper-tier S corporation, which has
two individual shareholders, and (2) an
upper-tier partnership, which has three
partners—a C corporation, an estate, and
an individual. Under these proposed regulations, relevant basis would be computed with respect to the three individuals,
C corporation, and estate, and not with
respect to the upper-tier S corporation or
upper-tier partnership. The proposed regulations would refer to these persons as the
“ultimate members.” In the case of a tiered
arrangement, the use of the term “partner”
to refer to such ultimate members might
be confusing or inaccurate because such
persons may not be partners of the contributing partnership, and in fact, may not
be partners at all, if they are shareholders
of an upper-tier S corporation that is itself
a partner in the contributing partnership.
As such, the proposed regulations use the
term “member.”
The Treasury Department and the IRS
considered alternatives to the ultimate
member rule. One possible approach
would be to determine the application of
the Disallowance Rule with respect to the
contributing partnership by looking only
to the relevant bases of the contributing
partnership’s direct partners. In the example in which a contributing partnership has
two partners, an upper-tier S corporation
and an upper-tier partnership, the direct
partners would be the upper-tier S corporation and the upper-tier partnership. The
modified basis (and thus, relevant basis)
of the upper-tier S corporation or uppertier partnership could include basis attributable to shareholders or partners of the

1328

upper-tier entity that will not be expected
to claim the deduction. For example, this
might be the case because the contributing
partnership allocates all of the qualified
conservation contribution to the upper-tier
S corporation. Because the Disallowance
Rule is meant to compare the amount of
a claimed qualified conservation contribution with the equity investment made by
those persons expected to claim a deduction with respect to such contribution, it is
more consistent with the purposes of the
Disallowance Rule to compute relevant
basis only using the basis of those persons
who are expected to claim a deduction
with respect to the contribution.
Additionally, in the example earlier,
if the contributing partnership’s qualified
conservation contribution was not disallowed by the Disallowance Rule, the
upper-tier S corporation and the uppertier partnership would each be required
to determine the application of the
Disallowance Rule by looking to their
direct owners. Because section 170(h)
(7)(B)(i) requires that relevant basis be
traced to the portion of the real property
with respect to which the contribution is
made, the upper-tier S corporation’s and
upper-tier partnership’s determinations
would necessarily involve computations
by both the upper-tier entity and the
contributing partnership. Thus, in many
cases, computing relevant basis only with
respect to direct partners would not simplify the computations required to apply
the Disallowance Rule, because it would
still be necessary to carry the computations through each tier.
These proposed regulations would
provide numerous examples to determine
who is an ultimate member. Comments
are requested on the definition of ultimate
member, and whether additional examples
for specific situations would be helpful.
11. Upper-tier partnership
Proposed §1.170A-14(j)(3)(xi) would
provide that the term “upper-tier partnership” means a partnership that receives an
allocated portion.
Where appropriate, the proposed regulations would provide separate rules for
contributing partnerships, contributing S
corporations, upper-tier partnerships, and
upper-tier S corporations. The Treasury

Bulletin No. 2023–49

Department and the IRS are aware that
sometimes different naming conventions
are used to refer to tiered partnership
arrangements. For example, some may
refer to the contributing partnership as
the “property partnership” or “top-tier
partnership,” and in fact the IRS has used
that naming convention in some correspondence. That naming convention is
not inherently wrong, as different practitioners refer to the “bottom” and “top” of
a tiered structure differently. However, the
regulations under subchapter K of chapter
1 of the Code generally would refer to the
contributing partnership as the lower-tier
partnership, and to a partnership that owns
an interest in the contributing partnership
(either directly or indirectly) as an uppertier partnership. Accordingly, in a tiered
partnership ownership structure, these
proposed regulations reflect a naming
convention under which the contributing partnership would be the “lower-tier
partnership,” and a partnership receiving
a distributive share of a qualified conservation contribution from the contributing partnership would be an “upper-tier
partnership.”
12. Upper-Tier S Corporation
Proposed §1.170A-14(j)(3)(xii) would
provide that the term “upper-tier S corporation” means an S corporation that
receives an allocated portion.
C. Effect of the Disallowance Rule
As noted previously, section 170(h)(7)
(A) applies the Disallowance Rule to both
contributing partnerships and upper-tier
partnerships. Section 170(h)(7) does not
explicitly address what effect the application of the Disallowance Rule to one
partnership or S corporation in a tiered
structure has on the other partnerships
or S corporations in the tiered structure.
These proposed regulations would provide that if the Disallowance Rule applies
to a partnership or S corporation, then the
qualified conservation contribution is a
disallowed qualified conservation contribution to that entity as well as to any person receiving a distributive share or pro
rata share, directly or indirectly, of that
entity’s disallowed qualified conservation
contribution; however, the disallowance

Bulletin No. 2023–49

would not affect the qualified conservation contribution with respect to any
lower-tier entities. In other words, if the
application of the Disallowance Rule with
respect to an upper-tier partnership or
upper-tier S corporation results in a disallowed qualified conservation contribution, that would affect Federal income tax
consequences up the chain of tiers, but not
down the chain of tiers, so, for example,
the contributing partnership would not be
affected.
The Treasury Department and the IRS
considered other approaches, such as
always re-testing the application of the
Disallowance Rule to an upper-tier partnership’s or upper-tier S corporation’s
allocated portion, even when the contribution is a disallowed qualified conservation
contribution with respect to the lower-tier partnership. Under this approach,
if the allocated portion does not exceed
2.5 times the sum of each of the uppertier partnership’s or upper-tier S corporation’s ultimate member’s relevant basis,
the allocated portion would be a qualified conservation contribution and not
disallowed to the upper-tier partnership’s
non-pass-through partners or the uppertier S corporation’s shareholders, even
though the contribution was a disallowed
qualified conservation contribution to the
non-pass-through partners of the lower-tier partnership. Allowing re-testing of
contributions that have already failed the
Disallowance Rule would be inconsistent
with the purposes of the Disallowance
Rule because it would inappropriately
encourage the creation of tiered structures
to allow some ultimate members to avoid
the Disallowance Rule. These proposed
regulations are intended to prevent avoidance of the purposes of section 170(h)
(7) and ensure disallowance of deductions attributable to disallowed qualified
conservation contributions. The Treasury
Department and the IRS request comments
on the application of the Disallowance
Rule in tiered structures.
Under the authority of section 170(h)
(7)(G)(ii) to issue regulations or other
guidance to prevent the avoidance of the
purposes of section 170(h)(7), proposed
§1.170A-14(j)(4)(i) would provide that,
if a contributing partnership’s or contributing S corporation’s qualified conservation contribution is a disallowed

1329

qualified conservation contribution, then:
(1) any upper-tier partnership’s or uppertier S corporation’s allocated portion of
such contribution is a disallowed qualified
conservation contribution, regardless of
whether such allocated portion exceeds
2.5 times the sum of each of the uppertier partnership’s or upper-tier S corporation’s ultimate member’s relevant basis;
and (2) no person (whether holding a
direct or indirect interest in such contributing partnership or contributing S corporation) may claim a deduction under
any provision of the Code with respect to
any amount of such disallowed qualified
conservation contribution, regardless of
whether that person’s distributive share
or pro rata share of the disallowed qualified conservation contribution exceeds 2.5
times its relevant basis. The reference to
“any provision of the Code” is necessary
to prevent taxpayer attempts to avoid the
Disallowance Rule by claiming a deduction with respect to any amount of a qualified conservation contribution under a
provision of the Code other than section
170 in cases in which no deduction is
allowable under section 170 by reason of
section 170(h)(7). For example, this proposed rule would disallow a deduction
under section 642(c) of the Code for a
trust that is a partner in a partnership with
respect to a distributive share of a disallowed qualified conservation contribution
from the partnership.
Proposed §1.170A-14(j)(4)(ii) would
provide that if a contributing partnership’s
or contributing S corporation’s qualified
conservation contribution is not a disallowed qualified conservation contribution, then: (1) the distributive share or pro
rata share of any ultimate member holding
a direct interest in the contributing partnership or contributing S corporation is
not a disallowed qualified conservation
contribution; and (2) any upper-tier partnership or upper-tier S corporation that
receives an allocated portion of such qualified conservation contribution must separately apply the rules of section 170(h)
(7) and proposed §1.170A-14(j) through
(m) to determine whether that upper-tier
partnership’s or upper-tier S corporation’s
allocated portion is a disallowed qualified
conservation contribution.
Proposed §1.170A-14(j)(4)(iii) would
provide that, if an upper-tier partnership’s

December 4, 2023

or upper-tier S corporation’s allocated
portion is a disallowed qualified conservation contribution, then: (1) any subsequent
upper-tier partnership’s or upper-tier
S corporation’s allocated portion of such
allocated portion would be a disallowed
qualified
conservation
contribution,
regardless of whether the subsequent
upper-tier partnership’s or upper-tier
S corporation’s allocated portion exceeds
2.5 times the sum of each of the subsequent upper-tier partnership’s or uppertier S corporation’s ultimate member’s
relevant basis; and (2) no person (whether
holding a direct or indirect interest in that
upper-tier partnership or upper-tier S corporation) would be able to claim a deduction under any provision of the Code with
respect to any amount of that upper-tier
partnership’s or upper-tier S corporation’s
allocated portion, regardless of whether
that person’s distributive share or pro rata
share of the allocated portion exceeds
2.5 times its relevant basis. Similar to
proposed §1.170A-14(j)(4)(i), proposed
§1.170A-14(j)(4)(iii) would be issued
under the authority of section 170(h)
(7)(G)(ii) to issue regulations or other
guidance to prevent the avoidance of the
purposes of section 170(h)(7). However,
this proposed rule would not affect the
application of proposed §1.170A-14(j)
through (m) to another partner of the contributing partnership; for example, if the
qualified conservation contribution is not
a disallowed qualified conservation contribution with respect to the contributing
partnership, then the distributive share of
such contribution of an ultimate member holding a direct interest in the contributing partnership is not a disallowed
qualified conservation contribution, notwithstanding that the qualified conservation contribution is a disallowed qualified
conservation contribution with respect
to one or more upper-tier partnerships or
upper-tier S corporations.
Proposed §1.170A-14(j)(4)(iv) would
provide that, if an upper-tier partnership’s
or upper-tier S corporation’s allocated
portion is not a disallowed qualified conservation contribution, then: (1) the distributive share or pro rata share of such
allocated portion of any ultimate member
holding a direct interest in the upper-tier
partnership or upper-tier S corporation is
not a disallowed qualified conservation

December 4, 2023

contribution; and (2) any subsequent
upper-tier partnership or upper-tier S corporation that receives an allocated portion
of such allocated portion must separately
apply the rules of section 170(h)(7) and
proposed §1.170A-14(j) through (m)
to determine whether that subsequent
upper-tier partnership’s or upper-tier S
corporation’s allocated portion is treated
as a disallowed qualified conservation
contribution.
The proposed regulations contain
examples illustrating the rules with
respect to tiers of entities. The Treasury
Department and the IRS request comments on whether additional examples
would be helpful.
D. No inference
The Treasury Department and the IRS
are aware that, even though section 605(c)
(2) of the SECURE 2.0 Act plainly states
that no inference is intended as to any
contribution for which a deduction is not
disallowed by reason of section 170(h)(7),
some practitioners have taken the position
that section 170(h)(7) operates as a “safe
harbor.” According to these practitioners,
a qualified conservation contribution that
is not disallowed by the Disallowance
Rule is somehow immune to a challenge
on other grounds, including failure to
comply with other rules under section
170 and overvaluation of the contribution.
Such a position is baseless and contradicted by the statutory language.
To clarify this issue, proposed
§1.170A-14(j)(5) would provide that
there is no presumption that a qualified
conservation contribution that is not a
disallowed qualified conservation contribution is compliant with section 170, any
other section of the Code, the regulations,
or any other guidance thereunder. It would
also provide that compliance with section
170(h)(7) and proposed §1.170A-14(j)
through (n) is not a safe harbor for purposes
of any other provision of law, including
the other requirements of section 170 and
the value of the contribution. Such transactions are subject to adjustment or disallowance for any other reason, including
failure to satisfy the requirements of section 170 and the overvaluation of the contribution; for example, failure to properly
execute Form 8283, Noncash Charitable

1330

Contributions, violation of the partnership
anti-abuse rule of §1.701-2, lack of economic substance, or other rules or judicial doctrines. In addition, compliance
with proposed §1.170A-14(j) through (n)
would not preclude the application of any
penalty, including penalties for valuation misstatement, negligence, and fraud.
Proposed §1.170A-14(j)(5) would also
provide that taxpayers who engage in such
transactions may be required to disclose
under §1.6011-4 the transactions as listed
transactions.
E. Determination of Relevant Basis
Consistent with section 170(h)(7)(B)
(i), proposed §1.170A-14(k) would provide that, for purposes of §1.170A-14, the
term “relevant basis” means, with respect
to any ultimate member, the portion of
such ultimate member’s modified basis
(as defined in proposed §1.170A-14(l))
that is allocable (under the rules of proposed §1.170A-14(m)) to the portion of
the real property with respect to which
the qualified conservation contribution is
made.
1. Modified Basis
Proposed §1.170A-14(l)(1) would
provide that, in the case of an ultimate
member holding a direct interest in a partnership, the ultimate member’s modified
basis is determined by such partnership
immediately before the qualified conservation contribution is made in the manner
described in §1.170A-14(l)(2). In the case
of an ultimate member holding a direct
interest in an S corporation, the ultimate
member’s modified basis would be determined by such S corporation in the manner described in §1.170A-14(l)(3).
a. Modified basis of ultimate members
that are partners
Consistent with section 170(h)(7)(B)
(ii), the proposed regulations would provide rules that are designed to determine a
partner’s modified basis immediately prior
to the qualified conservation contribution.
Without additional guidance under section
706, there may be situations in which the
contribution is allocated to partners that
did not hold an interest at the time of the

Bulletin No. 2023–49

qualified conservation contribution. Such
partners would not have any bases in their
partnership interests immediately before
the contribution, and thus, without additional rules, their modified bases and relevant bases would be zero. As discussed
later in this preamble, these proposed regulations would contain rules under section
706 that would treat a qualified conservation contribution as an extraordinary item
under §1.706-4(e) that must be allocated
only to partners holding an interest in the
partnership at the time of the contribution.
Proposed rules under §1.706-3 would
ensure that only partners holding an interest in an upper-tier partnership at the
time of the contribution would receive a
distributive share of an allocated portion.
Thus, all ultimate members who are partners would be partners at the time of day
the contribution is made. In other words,
for a partner to be an ultimate member,
the partner must have been a partner at the
time of day the contribution is made and
must have been allocated a distributive
share of that contribution. These proposed
rules are intended to facilitate the computation of modified basis immediately
before the contribution, consistent with
section 170(h)(7)(B)(ii)(I).
The proposed regulations would provide a process for determining a partner’s
modified basis. Proposed §1.170A-14(l)
(2)(i) would provide that, for purposes
of §1.170A-14, the term “modified
basis” means, with respect to any ultimate member that is a direct partner in
either a contributing partnership or an
upper-tier partnership, such ultimate
member’s adjusted basis in its interest
in the partnership in which the ultimate
member holds a direct interest as of the
beginning of the first day of the partnership’s taxable year in which the qualified
conservation contribution is made with
adjustments as determined under proposed §1.170A-14(l)(2)(ii) through (v).
However, if the ultimate member was not
a partner as of the beginning of the first
day of the partnership’s taxable year, then
the term “modified basis” would mean
such ultimate member’s adjusted basis
in its interest in the partnership immediately after the transaction that resulted in
the ultimate member becoming a partner
with adjustments as determined under
proposed §1.170A-14(l)(2)(ii) through

Bulletin No. 2023–49

(v). The Treasury Department and the
IRS considered alternatives to this rule,
including simply requiring that “adjusted
basis” be computed immediately prior to
the contribution. However, adjusted basis
is typically computed as of the beginning
of a taxable year, and it may be unclear
to taxpayers how to compute adjusted
basis as of another time during the year.
Current regulations generally do not
require partners to compute their adjusted
bases in their partnership interests as of
the time events, such as the making of
a qualified conservation contribution,
occur. Accordingly, these proposed regulations would start with a calculation of
adjusted basis that partners are familiar
with computing, and then make adjustments to arrive at an amount that reflects
the partner’s modified basis immediately
before the contribution.
Proposed §1.170A-14(l)(2)(ii) through
(v) would provide four adjustments that
must be made to a partner’s adjusted basis
to arrive at modified basis. These adjustments would be required to be made in
the order in which they are listed. First,
proposed §1.170A-14(l)(2)(ii) would
provide that the computation of modified basis must start with the ultimate
member’s adjusted basis under proposed
§1.170A-14(l)(2)(i) and then reflect an
increase for any contributions made by the
ultimate member to the partnership during
the portion of the year commencing with
the beginning of the taxable year of the
partnership and ending immediately prior
to the time of day at which the qualified
conservation contribution is made as provided in section 722 of the Code.
Second, proposed §1.170A-14(l)(2)
(iii) would provide that the amount determined under proposed §1.170A-14(l)
(2)(ii) must be adjusted, as provided in
section 705 of the Code, by the ultimate
member’s hypothetical distributive share
of partnership items attributable to the
portion of the year commencing with
the beginning of the taxable year of the
partnership and ending immediately prior
to the time of day at which the qualified
conservation contribution is made. For
example, if a calendar-year partnership
makes a qualified conservation contribution at 9:17 a.m. on November 19 of Year
1, then the hypothetical distributive share
would be required to be made based on

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the partnership items attributable to the
period between the beginning of the
day on January 1 Year 1 and 9:16 a.m.
on November 19 Year 1. In making this
determination, the partnership would be
required to apply the rules of §1.706-4
and apply a hypothetical interim closing
method to allocate the partnership’s items
attributable to the portion of the year commencing with the beginning of the taxable
year of the partnership and ending immediately prior to the time of day at which
the qualified conservation contribution
is made. Proposed §1.170A-14(l)(2)(iii)
would provide that the partnership cannot apply any convention in §1.706-4(c)
to the hypothetical determination of the
partners’ distributive shares, but rather
must perform the calculation as though
the determination occurred immediately
prior to the time of day at which the qualified conservation contribution is made.
Proposed §1.170A-14(l)(2)(iii) would
clarify that this hypothetical determination of the partners’ distributive shares
is only for purposes of calculating modified basis. Proposed §1.170A-14(l)(2)
(iii) would also make clear that proposed
§1.170A-14(l) does not require the partnership to use the interim closing method
with respect to the determination of its
partners’ actual distributive shares for
the taxable year in which the qualified
conservation contribution is made or otherwise. See section 706(d) and the regulations thereunder for the permissible
methods that may be used in the determination of the partners’ distributive shares
for a partnership taxable year in which
there is a variation in a partner’s interest
in the partnership. As described later this
preamble, proposed §§1.706-3(a) and
1.706-4(e)(2)(ix) would provide special
rules for the allocation of qualified conservation contributions.
The Treasury Department and the IRS
considered using the partners’ actual
distributive shares, determined as of the
time of the contribution. In the case of a
partnership using the proration method,
however, such an approach would result
in the partners’ modified bases reflecting a portion of partnership items earned
or incurred by the partnership after the
time of the contribution, and thus would
be inconsistent with the requirement in
section 170(h)(7)(B)(ii)(I) that partners’

December 4, 2023

modified bases be determined immediately before the contribution. The
Treasury Department and the IRS request
comments on the approach taken in the
proposed regulations to determine the
partners’ distributive shares of partnership items attributable to the portion of
the year commencing with the beginning
of the taxable year of the partnership and
ending immediately prior to the time of
day at which the qualified conservation
contribution is made.
Third, proposed §1.170A-14(l)(2)(iv)
would provide that the amount determined
under proposed §1.170A-14(l)(2)(iii)
must be reduced (but not below zero) by
any distributions made by the partnership
to the ultimate member during the portion
of the year commencing with the beginning of the taxable year of the partnership
and ending immediately prior to the time
of day at which the qualified conservation
contribution is made as provided in section 733 of the Code.
Fourth, consistent with section 170(h)
(7)(B)(ii)(II), proposed §1.170A-14(l)(2)
(v) would provide that the amount determined under proposed §1.170A-14(l)(2)
(iv) must be reduced by the full amount of
the ultimate member’s share of §1.752-1
liabilities of any partnership (including
a lower-tier partnership). The remaining
amount would be such ultimate member’s
modified basis. Thus, under the proposed
regulations, an ultimate member’s modified basis may be less than zero. Under
the formulas for the determination of relevant basis discussed later in this preamble,
a negative modified basis will result in a
negative relevant basis. Because the application of the Disallowance Rule is based
on the sum of each ultimate member’s
relevant basis, if one ultimate member’s
relevant basis is negative, it will be added
to all other ultimate members’ relevant
bases, and the sum may be a positive or
negative number.
b. Modified basis of ultimate members
that are shareholders in an S corporation
Unlike the rules for partnerships discussed previously, S corporations do
not have extraordinary items that must
be allocated only to shareholders as of
the time of day the item occurs. Instead,
section 1377 of the Code and existing

December 4, 2023

§1.1377-1 generally require pro rata allocations. Section 1.1377-1(a) provides
that each shareholder’s pro rata share of
any S corporation item described in section 1366(a) of the Code for any taxable
year is the sum of the amounts determined with respect to the shareholder by
assigning an equal portion of the item
to each day of the S corporation’s taxable year, and then dividing that portion
pro rata among the shares outstanding
on that day. If a shareholder disposes
of its entire interest in an S corporation,
§1.1377-1(b) allows the S corporation
to make a terminating election, under
which the S corporation will determine
the terminating shareholder’s share as
though the S corporation’s taxable year
closed on the day of the termination.
However, there is no extraordinary item
rule for S corporations similar to §1.7064(e). As such, it may be the case that an S
corporation allocates a portion of a qualified conservation contribution to someone that was not a shareholder at the
time of the contribution, but that shareholder would still be treated as an ultimate member because the shareholder
received a pro rata share of the qualified
conservation contribution.
As described previously, the rules for
determining a partner’s modified basis
start with the partner’s adjusted basis at
the start of the partnership’s taxable year
and work forward to determine modified
basis immediately before the contribution. However, the Treasury Department
and the IRS are concerned that such an
approach is not appropriate for S corporation shareholders, as it could be unnecessarily burdensome and, in some cases,
impossible to determine each shareholder’s modified basis immediately prior to
the qualified conservation contribution
(because some ultimate members may
not be shareholders at the time of the contribution). To provide an administrable
standard consistent with the purposes of
section 170(h)(7), these proposed regulations would require the computation of
an S corporation shareholder’s modified
basis under an approach that is similar in
purpose to the approach for partners but
different in application.
Proposed §1.170A-14(l)(3)(i) would
provide that, for purposes of §1.170A14, the term “modified basis” means,

1332

with respect to any ultimate member that
is a shareholder of either a contributing
S corporation or an upper-tier S corporation, such ultimate member’s adjusted
basis in its shares in the S corporation as
of the end of the S corporation’s taxable
year in which the qualified conservation
contribution is made with adjustments as
determined under proposed §1.170A-14(l)
(3)(ii) and (iii). However, if the ultimate
member was not a shareholder at the end
of the S corporation’s taxable year in
which the qualified conservation contribution is made, then the term “modified
basis” would mean such ultimate member’s adjusted basis in its shares in the
S corporation immediately prior to the
transaction that terminated its interest
in the S corporation with adjustments as
determined under proposed §1.170A-14(l)
(3)(ii) and (iii).
The Treasury Department and the IRS
considered several alternatives to this
rule. One method would be to require a
determination of a portion of modified
basis for every day during the S corporation’s taxable year, because S corporations generally allocate the contribution
on a pro rata basis among the shareholders on each day of the taxable year.
These proposed regulations do not take
that approach because the Treasury
Department and the IRS are concerned
that such an approach, although technically accurate and consistent with the
purposes of section 170(h)(7), would
be too burdensome for taxpayers and
difficult for the IRS to administer. The
Treasury Department and the IRS also
considered using the shareholders’
adjusted bases as of the beginning of
the S corporation’s taxable year (rather
than as of the end of the year). However,
because qualified conservation contributions are typically made in the second
half of the year, especially in syndicated
transactions, the Treasury Department
and the IRS determined that such an
approach would be less accurate than
using the shareholders’ adjusted bases as
of the end of the year (or a shareholder’s
adjusted basis immediately prior to the
transaction that terminated their interest
in the S corporation).
Proposed §1.170A-14(l)(3)(i) would
also clarify that modified basis does not
include the ultimate member’s adjusted

Bulletin No. 2023–49

basis of any indebtedness of the S corporation to the ultimate member.1
Proposed §1.170A-14(l)(3)(ii) and
(iii) would provide two adjustments that
must be made to arrive at modified basis.
These adjustments would be required to
be made in the order in which they are
listed. First, proposed §1.170A-14(l)(3)
(ii) would provide that the computation
of modified basis must start with the ultimate member’s adjusted basis under proposed §1.170A-14(l)(3)(i) and then must
reflect an increase for the extent to which
the adjusted basis reflects a reduction as
a result of the qualified conservation contribution. Thus, the ultimate member’s
modified basis with respect to a qualified conservation contribution would
not reflect any reduction for the ultimate
member’s pro rata share of the S corporation’s basis in the conservation easement or other property contributed in the
qualified conservation contribution. This
adjustment in proposed §1.170A-14(l)(3)
(ii) woul

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3Aa02ddfb2924fa4d2. Public record. Not legal advice.