Federal Register: February 11, 2009 (Volume 74, Number 27)
DOCID: fr11fe09-4 FR Doc E9-2828
DEPARTMENT OF THE TREASURY
Internal Revenue Service
CFR Citation: 26 CFR Part 1
RIN ID: RIN 1545-BA11
TD ID: [TD 9442]
NOTICE: RULES
DOCID: fr11fe09-4
DOCUMENT ACTION: Correcting amendment.
SUBJECT CATEGORY:
Consolidated Returns; Intercompany Obligations; Correction
DATES: This correction is effective February 11, 2009, and is applicable on December 29, 2008.
[[Page 6829]]
DOCUMENT SUMMARY:
This document contains corrections to final regulations (TD 9442) that were published in the Federal Register on Monday, December 29, 2008 (73 FR 79324) under section 1502 of the Internal Revenue Code providing guidance regarding the treatment of transactions involving obligations between members of a consolidated group.
SUMMARY:
Consolidated Returns; Intercompany Obligations; Correction,
SUPPLEMENTAL INFORMATION
Background
The final regulations that are the subject of this document are under section 1502 of the Internal Revenue Code.
Need for Correction
As published, final regulations (TD 9442) contains errors that may prove to be misleading and are in need of clarification.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements. Correction of Publication
Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:
PART 1INCOME TAXES
Paragraph 1. The authority citation for part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.150213 is amended as follows:
1. The second sentence of paragraph (g)(3)(i)(B) is revised.
2. Paragraph (g)(3)(i)(B)(1)(vi) is revised.
3. Paragraph (g)(7)(ii) Example 4. (ii) is revised.
4. The paragraph title for paragraph (g)(7)(ii) Example 4. (iv) is added.
5. The sixth sentence of paragraph (g)(7)(ii) Example 5. (i) is revised.
Sec. 1.150213 Intercompany transactions.
* * * * *
(g) * * *
(3) * * *
(i) * * *
(B) * * * In making this determination, if a creditor or debtor
realizes an amount in a transaction in which a creditor assigns all or
part of its rights under an intercompany obligation to the debtor, or a
debtor assigns all or part of its obligations under an intercompany
obligation to the creditor, the transaction will be treated as an
extinguishment and will be excepted from the definition of ``triggering
transaction'' only if either of the exceptions in paragraphs (g)(3)(i)(B)(5) or (6) of this section apply. * * *
(1) * * *
(vi) The stock of the transferee member (or a highertier member
other than a highertier member of an 80percent chain that includes
the transferor and transferee) is disposed of within 12 months from the
assignment of the intercompany obligation, unless at the time of the
assignment, the transferor member, transferee member (or in the case of
successive section 351 exchanges, each transferor and transferee
member) and the debtor member are all in the same 80percent chain; and
all of the stock of the transferee (or in the case of successive
section 351 exchanges, the lowesttier transferee) held by members of
the group is disposed of as part of the same plan or arrangement,
either directly or indirectly, to persons that are not members of the group.
* * * * *
(7) * * *
(ii) * * *
Example 4. * * *
(ii) No deemed satisfaction and reissuance. Because the
assignment of the B note is an exchange to which section 351 applies
and neither S nor B recognize gain or loss, the transaction is not a
triggering transaction under paragraph (g)(3)(i)(B)(1) of this
section, and the note is not treated as satisfied and reissued under paragraph (g)(3)(ii) of this section.
* * * * *
(iv) Transferee loss subject to limitation. * * *
* * * * *
Example 5. * * *
(i) * * * The terms and conditions of the note are not modified
in connection with the sales transaction, the transaction does not
result in a change in payment expectations, and no amount of income,
gain, deduction, or loss is recognized by S, B, or T with respect to the note.
* * * * *
Guy Traynor,
Acting Chief, Publications and Regulations Branch, Legal Processing
Division, Associate Chief Counsel, (Procedure and Administration). [FR Doc. E92828 Filed 21009; 8:45 am]
BILLING CODE 483001P
FOR FURTHER INFORMATION CONTACT
Frances Kelly, (202) 622-7770 (not a tollfree number).