preciation reserves; and (b) where property is acquired in a transsion which is partially taxable to the transferor (as in the case of ot) and the transferee is required, under the Code and regulations, carry over the transferor's basis, the basis of the assets will be cared over at their historical cost (or other basis) together with their spective depreciation reserves. Appropriate adjustments to the ast account, however, will be made in accordance with the applicable ovisions of the Code and regulations.

In computing the asset ratio, the total basis of the transferee's assets the base year will, of course, have to include the basis of those asts which were transferred to the transferee with a carryover basis nd which were owned by the transferor (or his predecessor) in the ansferee's base year.

3. Question:

In a typical trade-in situation, that is, one where depreciable propty is acquired in exchange for cash and other property in a transacon described in section 1031 of the Internal Revenue Code of 1954 in hich no gain or loss is recognized, what is the basis and depreciation eserve with respect to the property acquired at the time of acquisition or purposes of the computations required by the Revenue Procedure?

Answer:

The basis of the acquired property, which is an addition to the asset ccount at the time of acquisition, is equal to the adjusted basis of the ›roperty traded in plus the cash paid, and the depreciation reserve vith respect to such acquired property is zero.

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26 CFR 601.310: Forms.

(Also Part III-A, Sections 5201, 5205,

5207; 201.466, 201.547, 201.633.)

Rev. Proc. 63–19

Pending revision of Form 2260, Monthly Report of Bottle Strip Stamps, strip stamps used for restamping bottled spirits should be reported at line 7 of the form.

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to outline the method of reporting strip stamps used for restamping bottled spirits when the spirits are not rebottled.

SEC. 2. REVISED FORM 2260.

Form 2260, Monthly Report of Bottle Strip Stamps, is being revised as of July 1963 to provide additional space for reporting strip stamps used for restamping without rebottling.

SEC. 3. INTERIM MODIFICATION OF FORM 2260.

Proprietors required to submit reports on Form 2260 will, commencing with the report submitted for the month of July 1963 and continuing until the receipt of the July 1963 revision of Form 2260, report at line 7 of the form all strip stamps used for restamping without rebottling. Such entries at line 7 will be appropriately identified and will include strip stamps used off plant premises as well as those used on the premises. On receipt of Form 2260, revised July 1963, the use of prior revisions of the form will be discontinued.

SEC. 4. INQUIRIES.

Inquiries concerning this Revenue Procedure should refer to number and be addressed to the office of the appropriate Assista Regional Commissioner, Alcohol and Tobacco Tax.

26 CFR 601.201: Rulings and determination letters.

Rev. Proc. 63-3)

Inquiries have been received concerning the scope of the "no-ruling policy set forth in section 3.01 of Revenue Procedure 62-32, CR 1962-2, 527, at 529, regarding the transfer of appreciated stocks: securities to a newly organized investment company in exchange shares of the stock of such investment company, as a result of solicita tion by promoters, brokers, or investment houses, in connection wit section 351 of the Internal Revenue Code of 1954 and certain acquis tions in connection with section 368 of the Code. This policy equally applicable to such transfers to, or acquisition by, a partner ship, trust, association, or simliar entity in exchange for interes therein. Revenue Procedure 62-32 is hereby amplified.

26 CFR 601.301: Imposition of taxes, qualification requirements, and regulations.

(Also Part III-A, Section 5008; 201.482.)

Rev. Proc. 63

Procedures for amending bottling records and statements of losses to reflect adjustments arising from Customs reports on entries of imported spirits.

Revenue Procedure 60-23, C.B. 1960-2, 997, superseded.

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to outline the metho of the Internal Revenue Service for adjusting bottling records a statements of losses at bottling premises to reflect changes in th quantity of imported spirits received and in the bottling gains or los resulting from Customs liquidation of entries, or other documentar evidence, relating to adjustment of tax on imported spirits. SEC. 2. CUSTOMS REPORTS.

When Customs chemists' reports, liquidation reports, or other doc mentary evidence of tax adjustment are received that affect the info mation which has been reported on Form 2733, Monthly Report Bottling Premises Operations, the bottler may, in lieu of filing amended Form 2733, file with the Assistant Regional Commissione Alcohol and Tobacco Tax, a statement identifying such reports other documents and detailing the changes made thereby. The stat ment shall include the following information:

1. The Customs entry number;

2. The Customs laboratory report number, if any;
3. The date the spirits were received;

1 Based on Technical Information Release 486, dated June 20, 1963.

4. The proof gallons originally included as received in the Form 2733;

5. The proof gallons as corrected; and

6. The increase or decrease resulting from the adjustment. The statement must be prepared in duplicate and executed under the penalties of perjury. The copy of the statement shall be retained by the bottler.

SEC. 3. FORM 2611, STATEMENT OF LOSSES AT BOTTLING PREMISES.

.01 Form 2611, Statement of Losses at Bottling Premises, shall reflect the quantity of imported spirits withdrawn from Customs custody consistent with the best information available to the proprietor at the time the form is filed. When Customs chemists' reports, liquidation reports, or other documentary evidence of tax adjustment are received that affect information which has been reported on Form 2611, filed for a prior claim period but within the current fiscal year, the bottler shall make the necessary adjustment on the next Form 2611 filed.

.02 When a Customs report or other documentary evidence is received that affects information reported on a Form 2611 filed for a prior fiscal year, the bottler should amend Form 2611 filed with the final fiscal-year claim in order that the final claim for that fiscal year may be reopened and adjusted. The bottler should, to the extent practical, defer filing an amended Form 2611 until all Customs reports on all such spirits have been received. An amended Form 2611 need not be filed and the claim need not be reopened where consideration of net tax adjustments would not result in a change in the amount claimed. Where a final liquidation report covers spirits withdrawn during two or more fiscal years and the report shows only a net adjustment for the spirits covered by the report, the bottler may allocate the quantity to be adjusted to the fiscal years involved, based on the best information available.

.03 Adequate notations shall be made in records and other documents to permit ready verification of each adjusting entry.

.04 The bottler shall report on Form 2611 filed in support of the final claim for a fiscal year (or in a statement attached thereto), the identity and quantity of any imported spirits received in that fiscal year on which a final liquidation report has not been received.

SEC. 4. EFFECT ON PRIOR REVENUE PROCEDURES.

Revenue Procedure 60-23, C.B. 1960-2, 997 is hereby superseded. SEC. 5. INQUIRIES.

Inquiries concerning this Revenue Procedure should refer to its number and be addressed to the office of the appropriate Assistant Regional Commissioner, Alcohol and Tobacco Tax.

26 CFR 601.602: Forms and instructions.

(Also Part I, Section 6109; 1.6109-1.)

Rev. Proc. 63-22

Use of account numbers by alien individuals on Federal tax returns, statements, or related documents.

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to provide guidance for alien individuals relative to the use of account numbers on Federal tax and information returns.

SEC. 2. BACKGROUND.

2

Section 6109 of the Internal Revenue Code of 1954, as added by Public Law 87-397, C.B. 1961-2, 348, authorizes the use of identifying numbers on Federal tax returns, statements, and related documents Section 1.6109-1 of the Income Tax Regulations requires an individuals taxpayer to show his account number on any return, statement, and other document filed after September 30, 1962, for periods beginning after December 31, 1961. He must also furnish his account number to any payer of interest, dividends, or other payments made to him after September 30, 1963, in respect of which a return, statement or other document is required to be made by the payer.

SEC. 3. USE OF ACCOUNT NUMBERS BY ALIEN INDIVIDUALS.

.01 A resident alien individual or a nonresident alien individual engaged in trade or business within the United States must include his account number, usually his social security account number, in the Form 1040, Individual Income Tax Return for Calendar or Fiscal Year, or Form 1040B, Nonresident Alien Individual Income Tax Return, and in any declaration of estimated tax required to be filed by him. If he receives certain interest or dividends and is requested to furnish his tax account number to the payer, he is also required to furnish his account number for use with respect to payments made to him as an individual.

.02 A nonresident alien individual not engaged in a trade or business within the United States does not need an account number. See section 1.6109-1 (d) of the Income Tax Regulations.

SEC. 4. APPLICATION FOR AND ASSIGNMENT OF ACCOUNT NUMBERS.

.01 If a Form 1040 or Form 1040B was filed by an alien individual for 1961, it is assumed that he did so either as a resident alien or nonresident alien engaged in a trade or business within the United States In such case, if he does not already have an account number, the alien individual must, if he is required to file a similar return for 1962 obtain one by filing an application on Form 3227, Application for Ac count Number, or Form SS-5, Application for Social Security Account Number, in accordance with the instructions on such form.

.02 Upon the filing of a properly completed application, a social security number will be assigned to the alien individual for use as indi cated in section 3.01, above. This number will be assigned for Federal tax account purposes and will also be used for social security tax pur poses if the alien individual enters employment or self-employment covered by the Social Security Act. Even though his employment is not covered by the Social Security Act, it will be necessary for him to obtain this number to enable the Internal Revenue Service to iden tify his Federal tax account.

If a Form 1040NB or Form 1040NB-a, Nonresident Alien Income Tax Return, was filed by an alien individual for 1961, it is assumed that he did so as a nonresident alien not engaged in a trade

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business within the United States. In such case, he does not need account number and need not make application for one.

.04 However, if an alien individual is a resident alien or a nonresint alien engaged in a trade or business within the United States, twithstanding the type of return filed by him, or if his status should Lange so that for 1962 or a later year he is required to file a Form 40 or Form 1040B as a resident alien or nonresident alien engaged a trade or business within the United States, he should apply for a cial security number for use as indicated above. An application for social security number may be obtained at the nearest Internal evenue or Social Security Office.

EC. 5. INQUIRIES.

Inquiries in regard to this Revenue Procedure should refer to its umber and be addressed to the office of the Assistant Commissioner Data Processing), Attention: D:O: M, Internal Revenue Service, Vashington, D.C., 20224.

26 CFR 601.201: Rulings and determination letters.

(Also Part I, Sections 401, 405; 1.401-1, 1.405-1.)

Rev. Proc. 63-23

Outline of procedures of the Internal Revenue Service with respect to requests as to the initial qualification of pension, annuity, profit-sharing, and bond purchase plans, which include selfemployed individuals, under sections 401 (a) and 405 (a) of the Internal Revenue Code of 1954, as amended and added by Public Law 87-792, and the status for exemption of related trusts under section 501 (a) of the Code.

Revenue Procedure 62-28, C.B. 1962-2, 496, and Revenue Procedure 62-31, C.B. 1962-2, 517, amplified.

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to describe the general procedures of the various offices of the Internal Revenue Service for issuing determination letters relating to the initial qualification of pension, annuity, profit-sharing, and bond purchase plans which cover self-employed individuals, under sections 401(a) and 405 (a) of the Internal Revenue Code of 1954, as amended and added by Public Law 87-792, C.B. 1962-3, 89, and for issuing determination letters. relating to the status for exemption of related trusts under section. 501 (a) of the Code.

SEC. 2. BACKGROUND AND GENERAL INFORMATION.

Public Law 87-792, the Self-Employed Individuals Tax Retirement Act of 1962, effective for taxable years beginning after December 31, 1962, accords certain tax benefits in connection with pension, annuity, profit-sharing, or bond purchase plans, which include selfemployed individuals, and which meet the applicable requirements of sections 401(a) or 405 (a) of the Code. A trust forming a part of such a plan is exempt from taxation as provided in section 501 (a) of the Code. A custodial account described in section 401 (f) of the