[Federal Register Volume 64, Number 6 (Monday, January 11, 1999)]
[Proposed Rules]
[Pages 1571-1573]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-151]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[REG-106905-98]
RIN 1545-AW09
Allocation of Loss With Respect to Stock and Other Personal
Property
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Partial withdrawal of notice of proposed rulemaking; notice of
proposed rulemaking by cross-reference to temporary regulations; and
notice of public hearing.
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SUMMARY: This document contains proposed Income Tax Regulations
relating to the allocation of loss recognized on the disposition of
stock and other personal property. The loss allocation regulations
primarily will affect taxpayers that claim the foreign tax credit and
that incur losses with respect to personal property and are necessary
to modify existing guidance. Prior proposed regulations are withdrawn.
This document also provides notice of a public hearing on these
proposed regulations.
DATES: Written comments must be received by May 5, 1999. Outlines of
oral comments to be discussed at the public hearing scheduled for May
26, 1999, must be received by May 5, 1999.
ADDRESSES: Send submissions to CC:DOM:CORP:R (REG-106905-98), room
5226, Internal Revenue Service, POB 7604, Ben Franklin Station,
[[Page 1572]]
Washington, DC 20044. Submissions may be hand delivered Monday through
Friday between the hours of 8 a.m. and 5 p.m. to: CC:DOM:CORP:R (REG-
106905-98), Courier's Desk, Internal Revenue Service, 1111 Constitution
Avenue, NW., Washington, DC. Alternatively, taxpayers may submit
comments electronically via the Internet by selecting the ``Tax Regs''
option on the IRS Home Page, or by submitting comments directly to the
IRS Internet site at
http://www.irs.ustreas.gov/prod/tax__regs/comments. html. The public
hearing will be held in room 2615, Internal Revenue Building, 1111
Constitution Avenue, NW., Washington, DC.
FOR FURTHER INFORMATION CONTACT: Concerning the regulations in general,
Seth B. Goldstein of the Office of Associate Chief Counsel
(International), (202) 622-3810; concerning submissions of comments,
the hearing, and/or to be placed on the building access list to attend
the hearing, Michael Slaughter, (202) 622-7190 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
Temporary regulations published elsewhere in this issue of the
Federal Register provide guidance concerning the allocation of loss
with respect to personal property. The text of those temporary
regulations also serves as the text of these proposed regulations. The
preamble to the temporary regulations explains the proposed
regulations. Proposed Sec. 1.865-1, published on July 8, 1996 (REG-
209750-95, formerly INTL-4-95 (1996-2 C.B. 484), 61 FR 35696), is
withdrawn.
Special Analyses
It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in Executive Order
12866. Therefore, a regulatory impact analysis is not required.
An initial regulatory flexibility analysis has been prepared for
this notice of proposed rulemaking under 5 U.S.C. 603. A summary of the
analysis is set forth below under the heading ``Summary of Initial
Regulatory Flexibility Analysis.'' Pursuant to section 7805(f) of the
Internal Revenue Code, this notice of proposed rulemaking will be
submitted to the Chief Counsel for Advocacy of the Small Business
Administration for comment on its impact on small businesses.
Summary of Initial Regulatory Flexibility Analysis
These proposed regulations under sections 861 and 865 of the
Internal Revenue Code address the allocation of loss with respect to
personal property and are necessary for the proper computation of the
foreign tax credit limitation under section 904 of the Internal Revenue
Code. These regulations are promulgated under sections 861, 865(j)(1)
and 7805 of the Internal Revenue Code. If adopted, these proposed
regulations will affect small entities such as small businesses but not
other small entities such as government or tax exempt organizations,
which do not pay taxes. The IRS and Treasury Department are not aware
of any federal rules that duplicate, overlap or conflict with these
regulations. None of the significant alternatives considered in
drafting these regulations would have significantly altered the
economic impact of these regulations on small entities. There are no
alternative rules that are less burdensome to small entities but that
accomplish the purpose of the statute. The IRS and Treasury Department
request comments from small entities concerning this analysis.
Comments and Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any written comments that are submitted
timely to the IRS (a signed original and eight (8) copies). In
particular, the IRS requests comments on the clarity of the proposed
regulations and how they may be made easier to understand. All comments
will be available for public inspection and copying.
A public hearing has been scheduled for May 26, 1999, beginning at
10 a.m. in room 2615 of the Internal Revenue Building, 1111
Constitution Avenue, NW., Washington, DC. Due to building security
procedures, visitors must enter at the 10th Street entrance, located
between Constitution and Pennsylvania Avenues, NW. In addition, all
visitors must present photo identification to enter the building.
Because of access restrictions, visitors will not be admitted beyond
the immediate entrance area more than 15 minutes before the hearing
starts. For information about having your name placed on the building
access list to attend the hearing, see the FOR FURTHER INFORMATION
CONTACT section of this preamble.
The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who
wish to present oral comments at the hearing must submit written
comments and an outline of the topics to be discussed and the time to
be devoted to each topic (signed original and eight (8) copies) by May
5, 1999. A period of 10 minutes will be allotted to each person for
making comments. An agenda showing the scheduling of the speakers will
be prepared after the deadline for receiving outlines has passed.
Copies of the agenda will be available free of charge at the hearing.
Drafting Information
The principal author of these regulations is Seth B. Goldstein, of
the Office of the Associate Chief Counsel (International), IRS.
However, other personnel from the IRS and Treasury Department
participated in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, 26 CFR part 1 is proposed to be amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 is amended by adding
an entry in numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.865-1 also issued under 26 U.S.C. 865. * * *
Par. 2. Section 1.861-8 is amended by revising paragraph (e)(8) to
read as follows:
Sec. 1.861-8 Computation of taxable income from sources within the
United States and from other sources and activities.
* * * * *
(e) * * *
(8) [The text of this proposed paragraph (e)(8) is the same as the
text of Sec. 1.861-8T(e)(8) published elsewhere in this issue of the
Federal Register.]
* * * * *
Par. 3. Section 1.865-1 is added immediately following Sec. 1.864-
8T, to read as follows:
Sec. 1.865-1 Loss with respect to personal property other than stock.
[The text of this proposed Sec. 1.865-1 is the same as the text of
Sec. 1.865-1T published elsewhere in this issue of the Federal
Register.]
Par. 4. Section 1.865-2 is amended by adding paragraphs (b)(4)(iii)
and (b)(4)(iv) Example 3 through Example 6 to read as follows:
Sec. 1.865-2 Loss with respect to stock.
* * * * *
(b) * * *
[[Page 1573]]
(4) * * *
(iii) [The text of this proposed paragraph (b)(4)(iii) is the same
as the text of Sec. 1.865-2T(b)(4)(iii) published elsewhere in this
issue of the Federal Register.]
(iv) * * *
Example 3 through Example 6 [The text of this proposed paragraph
(b)(4)(iv) Example 3 through Example 6 is the same as the text of
Sec. 1.865-2T(b)(4)(iv) Example 3 through Example 6 published elsewhere
in this issue of the Federal Register.]
* * * * *
Robert E. Wenzel,
Deputy Commissioner of Internal Revenue.
[FR Doc. 99-151 Filed 1-8-99; 8:45 am]
BILLING CODE 4830-01-U