Revenue

APRIL 20, 1964

THE UNIVERSITY
B MICHIGAN

APR 2 9 1964

LIBRARY

BULLETIN

HIGHLIGHTS OF THIS ISSUE

SPECIAL ANNOUNCEMENT:

Revenue Ruling 64–100, relating to whether certain Page 8. involuntary conversions constitute "sales_or

ex

changes" for purposes of section 337 of the Code,

is revised to avoid misinterpretation.

INCOME TAX:

page 9.

The Revenue Service prescribes the manner in which Rev. Rul. 64-115, a taxpayer may, for his first taxable year after 1962, elect to change his method of depreciation with respect to section 1245 property from any declining balance or sum of the years-digits method to the straight-line method.

page 20.

The Revenue Service considers whether a substitution Rev. Rul. 64–116, of stock options following a merger of two corporations is, under the circumstances, an "additional benefit" to the optionees within the meaning of section 421(g) (2) of the Code.

page 23.

An organization organized for educational purposes, Rev. Rul. 64-117, whose members are selected primarily on the basis of compatibility; which conducts regular meetings; and which maintains and operates a meeting house for members is held, under the circumstances, not exempt from Federal income tax under section 501(c)(3) of the Code as exclusively educational.

page 25.

A corporation whose primary activity is the operation Rev. Rul. 64–118, and maintenance of a chapter house for use by members of a college fraternity does not qualify for exemption as an educational organization described in section 501(c)(3) of the Code; it may, however, qualify for exemptions under section 501(c) (7).

page 30.

A public utility company is not required to file infor- Rev. Rul. 64–121, mation returns on interest payments made on customers' cash deposits unless such payments to any one customer aggregate $600 or more in a calendar year.

(Continued on page 3)

Finding Lists begin on page 59

TREASURY DEPARTMENT.

723-483°-64-1

INTERNAL REVENUE SERVICE

INTRODUCTION

The Internal Revenue Bulletin is the authoritative instrument of the Commissioner of Internal Revenue for the announcement of official rulings and procedures of the Internal Revenue Service, and for the publication of Treasury Decisions, Executive Orders, tax conventions, legislation, and court decisions pertaining to internal revenue matters. Other items considered to be of general interest are also published in the Bulletin, such as announcements relating to proposed regulations published with notice of proposed rulemaking, announcements relating to decisions of the Tax Court of the United States, announcements of the disbarment and suspension of attorneys and agents from practice before the Internal Revenue Service, Delegation Orders, names of organizations whose status as tax-exempt organizations for purposes of section 170 of the Internal Revenue Code of 1954 has been changed, etc.

It is the policy of the Service to publish in the Bulletin all substantive and procedural rulings of importance or of general interest, the publication of which is considered necessary to promote a uniform application of the laws administered by the Service. It is also the policy to publish all rulings and statements of procedures which supersede, revoke, modify, or amend any published ruling or procedure. Except where otherwise indicated, published rulings and procedures apply retroactively. Rulings and statements of procedures relating solely to matters of internal management are not published. However, statements of internal practices and procedures affecting rights or duties of taxpayers, or industry regulation, which appear in internal management documents, are published. Revenue Rulings and Revenue Procedures are based upon rulings and internal management documents prepared in the various divisions of the National Office, including the Office of the Chief Counsel for the Internal Revenue Service. In the preparation of these, caution is exercised to conceal the identity of the taxpayer, as well as any confidential personal and business information.

Revenue Rulings and Revenue Procedures reported in the Bulletin do not have the force and effect of Treasury Department Regulations (including Treasury Decisions), but are published to provide precedents to be used in the disposition of other cases, and may be cited and relied upon for that purpose. No unpublished ruling or decision will be cited or relied upon by any officer or employee of the Internal Revenue Service as a precedent in the disposition of other cases.

Since each published ruling represents the conclusion of the Service as to the application of the law to the entire state of facts involved, (Continued on page 4)