N-2016-36: Electric generator public - public utility under section 118

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June 10, 2016

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Issue Number: N-2016-36

Inside This Issue

Notice 2016-36 provides a safe harbor under which a transfer of property from an electricity generator to a regulated public utility, used to facilitate the transmission of electricity over the utility's transmission system, will not be treated as income under section 118. This notice updates the safe harbor as previously provided in Notice 88-12, Notice 90-60, and Notice 2001-82. The notice updates the safe harbor in ways to better accommodate current industry practices and technological advances and associated issues, such as grid congestion.

Notice 2016-36 will be in I.R.B. 2016-25, dated June 20, 2016.

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