[Federal Register Volume 66, Number 8 (Thursday, January 11, 2001)]
[Rules and Regulations]
[Pages 2256-2257]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-488]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1 and 7

[TD 8937]
RIN 1545-AY53


Stock Transfer Rules: Transition Rules

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations and removal of temporary regulations.

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SUMMARY: This document contains final regulations addressing 
distributions with respect to, or a disposition of, certain stock that 
was subject to prior temporary regulations under section 367(b). 
Section 367(b) addresses the application of nonrecognition exchange 
provisions in Subchapter C of the Internal Revenue Code to transactions 
that involve one or more foreign corporations.

DATES: Effective Date. These regulations are effective as of January 
11, 2001.
    Applicability Dates. These regulations apply to distributions or 
dispositions that occur on or after January 11, 2001.

[[Page 2257]]


FOR FURTHER INFORMATION CONTACT: Mark D. Harris, (202) 622-3860 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    On January 24, 2000, the IRS and Treasury issued final regulations 
under section 367(b) of the Internal Revenue Code (Code). At the same 
time, the IRS and Treasury also modified temporary regulation 
Sec. 7.367(b)-12(a). The final regulations and modified temporary 
regulation were effective as of February 23, 2000.
    As modified, Sec. 7.367(b)-12(a) addresses distributions with 
respect to, or a disposition of, stock that was subject to certain 
provisions of the temporary section 367(b) regulations that were in 
effect before February 23, 2000. This document finalizes the rule 
stated in Sec. 7.367(b)-12(a) in order to insure its continued 
application. See section 7805(e)(2) (stating a ``sunset rule'' 
applicable to temporary regulations).

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in Executive Order 12866. 
Therefore, a regulatory assessment is not required. It also has been 
determined that section 553(b) of the Administrative Procedure Act (5 
U.S.C. chapter 5) does not apply to these regulations, and because the 
notice of proposed rulemaking preceding the regulations was issued 
prior to March 29, 1996, the Regulatory Flexibility Act (5 U.S.C. 
chapter 6) does not apply.
    Pursuant to section 7805(f) of the Code, the notice of proposed 
rulemaking preceding these regulations was submitted to the Chief 
Counsel for Advocacy of the Small Business Administration for comment 
on the impact of the proposed regulations on small business.

Drafting Information

    The principal author of these regulations is Mark Harris of the 
Office of Associate Chief Counsel (International). However, other 
personnel from the IRS and Treasury Department participated in their 
development.

List of Subjects 26 CFR Parts 1 and 7

    Income taxes, Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR parts 1 and 7 are 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 in part as follows:

    Authority: 26 U.S.C. 7805 * * *

    Section 1.367(b)-12 also issued under 26 U.S.C. 367(a) and (b). 
* * *

    Par. 2. Section 1.367(b)-0 is amended by revising the introductory 
text and adding entries for Sec. 1.367(b)-12 to read as follows:


Sec. 1.367(b)-0  Table of contents.

    This section lists the paragraphs contained in Secs. 1.367(b)-1 
through 1.367(b)-6 and 1.367(b)-12.
* * * * *


Sec. 1.367(b)-12  Subsequent treatment of amounts attributed or 
included in income.

    (a) In general.
    (b) Applicable rules.
    (c) Effective date.

    Par. 3. Section 1.367(b)-12 is added to read as follows:


Sec. 1.367(b)-12  Subsequent treatment of amounts attributed or 
included in income.

    (a) In general. This section applies to distributions with respect 
to, or a disposition of, stock--
    (1) To which, in connection with an exchange occurring before 
February 23, 2000, an amount has been attributed pursuant to 
Sec. 7.367(b)-9 or 7.367(b)-10 of this chapter (as in effect prior to 
February 23, 2000, see 26 CFR part 1 revised as of April 1, 1999); or
    (2) In respect of which, before February 23, 2000, an amount has 
been included in income or added to earnings and profits pursuant to 
Sec. 7.367(b)-7 or Sec. 7.367(b)-10 of this chapter (as in effect prior 
to February 23, 2000, see 26 CFR part 1 revised as of April 1, 1999).
    (b) Applicable rules. See Sec. 7.367(b)-12(b) through (e) of this 
chapter (as in effect prior to January 11, 2001, see 26 CFR part 1 
revised as of April 1, 2000) for purposes of applying paragraph (a) of 
this section.
    (c) Effective date. This section applies to distributions or 
dispositions that occur on or after January 11, 2001.

PART 7--TEMPORARY INCOME TAX REGULATIONS UNDER THE TAX REFORM ACT 
OF 1976

    Par. 4. The authority citation for part 7 is amended by removing 
the entry for Sec. 7.367(b)-12 and continues to read in part as 
follows:

    Authority: 26 U.S.C. 7805 * * *


Sec. 7.367(b)-12  [Removed]

    Par. 5. Section 7.367(b)-12 is removed.

    Approved: December 28, 2000
Robert E. Wenzel,
Deputy Commissioner of Internal Revenue.
Jonathan Talisman,
Assistant Secretary of the Treasury.
[FR Doc. 01-488 Filed 1-10-01; 8:45 am]
BILLING CODE 4830-01-P