diff --git a/wp-includes/taxonomy.php b/wp-includes/taxonomy.php
index 80529d5748..957ce724d6 100644
--- a/wp-includes/taxonomy.php
+++ b/wp-includes/taxonomy.php
@@ -15,6 +15,8 @@
  * Creates the initial taxonomies when 'init' action is fired.
  */
 function create_initial_taxonomies() {
+	global $wp_rewrite;
+
 	register_taxonomy( 'category', 'post', array(
 		'hierarchical' => true,
 	 	'update_count_callback' => '_update_post_term_count',
@@ -22,7 +24,7 @@ function create_initial_taxonomies() {
 		'rewrite' => did_action( 'init' ) ? array(
 					'hierarchical' => true,
 					'slug' => get_option('category_base') ? get_option('category_base') : 'category',
-					'with_front' => false) : false,
+					'with_front' => ( get_option('category_base') && ! $wp_rewrite->using_index_permalinks() ) ? false : true ) : false,
 		'public' => true,
 		'show_ui' => true,
 		'_builtin' => true,
@@ -34,7 +36,7 @@ function create_initial_taxonomies() {
 		'query_var' => 'tag',
 		'rewrite' => did_action( 'init' ) ? array(
 					'slug' => get_option('tag_base') ? get_option('tag_base') : 'tag',
-					'with_front' => false) : false,
+					'with_front' => ( get_option('category_base') && ! $wp_rewrite->using_index_permalinks() ) ? false : true ) : false,
 		'public' => true,
 		'show_ui' => true,
 		'_builtin' => true,
@@ -329,7 +331,7 @@ function register_taxonomy( $taxonomy, $object_type, $args = array() ) {
 			$tag = '([^/]+)';
 
 		$wp_rewrite->add_rewrite_tag("%$taxonomy%", $tag, $args['query_var'] ? "{$args['query_var']}=" : "taxonomy=$taxonomy&term=");
-		$wp_rewrite->add_permastruct($taxonomy, "{$wp_rewrite->root}{$args['rewrite']['slug']}/%$taxonomy%", $args['rewrite']['with_front']);
+		$wp_rewrite->add_permastruct($taxonomy, "{$args['rewrite']['slug']}/%$taxonomy%", $args['rewrite']['with_front']);
 	}
 
 	if ( is_null($args['show_ui']) )
diff --git a/wp-includes/version.php b/wp-includes/version.php
index b42253028e..b3c63d057a 100644
--- a/wp-includes/version.php
+++ b/wp-includes/version.php
@@ -29,7 +29,7 @@ $wp_version = '3.2-bleeding';
  *
  * @global int $wp_db_version
  */
-$wp_db_version = 17056;
+$wp_db_version = 17510;
 
 /**
  * Holds the TinyMCE version