The Internal Revenue Bulletin is issued weekly and contains rulings, procedures and decisions published by the Internal Revenue Service and all Treasury Department regulations (including Treasury Decisions) pertaining to Internal Revenue matters. It may be obtained on a subscription basis from the Superintendent of Documents, Government Printing Office, Washington, D.C., 20402, for $6.00 per year-foreign $8.75. Single copies of the Bulletin-20 cents each.

The contents of the weekly Bulletin are consolidated at least semiannually into a permanent, indexed, Cumulative Bulletin. These are sold on a single-copy basis. Subscribers to the weekly Bulletin will be notified when copies of the Cumulative Bulletins are available.

Certain issues of Cumulative Bulletins are out of print and are therefore not available. Persons desiring available Cumulative Bulletins which are listed below may obtain them from the Superintendent of Documents at prices as follows:

1 House, Senate, and conference reports on revenue bills enacted as the act of October 3, 1913, the act of October 22, 1914, and the Revenue Acts of 1916 to 1938, inclusive, and on amendment to such acts.

Printed in one volume.

All inquiries in regard to these publications and subscriptions should be sent to the Superintendent of Documents, Government Printing Office, Washington, D.C., 20402.

A loss resulting from property damage caused by ter-
mites will no longer be considered a casualty loss;
Revenue Ruling 59-277 revoked.

The Revenue Service will follow the decisions in Mc-
Donald (CA-5) and Universal Leaf Tobacco Com-
pany (CA-4), which deal with deductions for state
income tax paid by a corporation on gain from the
sale or exchange of all its assets; Revenue Ruling
60-236 revoked.

Certain stock transfers which do not provide the requi-
site continuity of interest do not qualify as a reor-
ganization under section 368(a)(1) (B) of the Code.
Exemption from Federal income tax may be granted to
a corporation organized, as an adjunct to a univer-
sity law school, to publish a law review journal for
the purpose of training students in legal research,
writing and editing in connection with regular cur-
ricular activities.

Amendments to the regulations have been adopted as

follows:

Rev. Rul. 63–232, page 6.

Rev. Rul. 63–233, page 7.

Rev. Rul. 63–234, page 8.

Rev. Rul. 63–235, page 20.

page 22.

Under sections 821 through 826, 831, 832, 841, 1016 T.D, 6681,
and 1201 of the Code, relating to the taxation of
mutual fire and casualty insurance companies, to
conform them to section 8 of the Revenue Act of
1962 and the Tax Rate Extension Act of 1963.

page 10.

Under section 453 of the Code, relating to the rules T.D. 6682,
for determining the portion of sales under a re-
volving credit plan which may be treated as sales
on the installment plan.

Under sections 955 and 957 (c) of the Code, relating T.D. 6683,
to the income of controlled foreign corporations
from sources without the United States.

(Continued on page 3)

page 74.

Finding List of Technical Information Releases is on page 108.

Other Finding Lists begin on page 109.

TREASURY DEPARTMENT • INTERNAL REVENUE SERVICE

710-167-63-1

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)

DEPOSITED BY THE

UNITED STATES OF AMERICA

3

HIGHLIGHTS OF THIS ISSUE-Continued from page 1

EMPLOYMENT TAXES:

The Railroad Retirement Tax Act has been amended to increase from $400 to $450 the amount of compensation per month which is subject to tax, effective with respect to services performed in November 1963 or any month thereafter. EXCISE TAXES:

Loading and unloading devices designed to be attached to or used in connection with taxable motor vehicles to add to their utility are automobile “parts or accessories" for purposes of the manufacturers tax. Drums and tambourines which are suitable for use in playing musical compositions or for the use in teaching music are musical instruments for purposes of the manufacturers tax, even though they may be referred to as "toys" by the manufacturer. For purposes of the manufacturers tax, the price charged for automotive parts sold by a manufacturing company to its subsidiary is not recognized as "the fair market price" merely because similar articles are sold for an equivalent price in so-called "private brand" transactions. ADMINISTRATIVE:

A tax practitioner's workload is considered as a factor
in granting extensions of time for filing individual
income tax returns.

Cumulative Bulletin 1963–1, consolidating material pub-
lished in weekly Bulletins during the first 6 months
of 1963, is now available for purchase from the Su-
perintendent of Documents, Washington, D.C.

Public Law 88-133,

page 103. Announcement 63– 112, page 106.

Rev. Rul. 63–236, page 97.

Rev. Rul. 63–237, page 99.

Rev. Rul. 63–238, page 100.

Announcement 63113, page 106.

Announcement 63– 114, page 107.

INTRODUCTION-(Continued from page 2)

Service personnel and others concerned are cautioned against reaching the same conclusions in other cases unless the facts and circumstances are substantially the same. In applying rulings and procedures published in the Bulletin, personnel of the Service and others concerned must consider the effect of subsequent legislation, regulations, court decisions, rulings and procedures.

Each published ruling is designated as a "Revenue Ruling," and each published procedure is designated as a "Revenue Procedure." These should be cited by reference to the year of issuance and the Bulletin and page where reported. Thus, Revenue Ruling No. 10 for 1963, which is reported on page 7 of Bulletin No. 2 for 1963, should be cited as "Rev. Rul. 63-10, I.R.B. 1963-2, 7," until it appears in the Cumulative Bulletin, when it should be cited as "Rev. Rul. 63-10, C.B. 1963-1,-" Similarly, Revenue Procedure No. 2 for 1963, which is reported on page 13 of Bulletin No. 3 for 1963, should be cited as "Rev. Proc. 63–2, Î.R.B. 1963-3, 13," until it appears in the Cumulative Bulletin. Revenue Rulings are keyed to the applicable sections of the Internal Revenue Code and regulations.

The Bulletin is published weekly and may be obtained on a subscription basis from the Superintendent of Documents, as indicated below. The contents of the Bulletin are consolidated at least semiannually into a permanent, indexed, Cumulative Bulletin. These are sold on a single-copy basis. Subscribers to the weekly Bulletin will be notified when copies of the Cumulative Bulletins are available.

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.

For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C., 20402. Price: 20 cents (single copy (. Subscription price: $6.00 a year; $2.75 additional for foreign mailing.