[Federal Register Volume 67, Number 248 (Thursday, December 26, 2002)]
[Proposed Rules]
[Page 78761]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-32331]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-150313-01]
RIN 1545-BA80


Redemptions Taxable as Dividends; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correction to notice of proposed rulemaking and notice of 
public hearing.

-----------------------------------------------------------------------

SUMMARY: This document contains corrections to a notice of proposed 
rulemaking and notice of public hearing (REG-150313-01) which was 
published in the Federal Register on Friday,October 18, 2002 (67 FR 
64331). This regulation provides guidance regarding the treatment of 
the basis of redeemed stock when a distribution in redemption of such 
stock is treated as a dividend, as well as guidance regarding certain 
acquisitions of stock by related corporations that are treated as 
distributions in redemption of stock.

FOR FURTHER INFORMATION CONTACT: Lisa K. Leong at (202) 622-7530 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    The proposed regulations that are the subject of these corrections 
are under sections 302, 304, 704, 861, 1371, 1374, and 1502 of the 
Internal Revenue Code.

Need for Correction

    As published, this notice of proposed rulemaking contains errors 
that may prove to be misleading and are in need of clarification.

Correction of Publication

    Accordingly, the publication of the notice of proposed rulemaking 
and notice of public hearing (REG-150313-01), which is the subject of 
FR. Doc. 02-26449, is corrected as follows:
    1. On page 64332, column 1, in the preamble under the paragraph 
heading ``Paperwork Reduction Act'', paragraph 7, line 12, the language 
``loss. The respondents are shareholders'', is corrected to read ``loss 
(or gain, as appropriate). The respondents are shareholders'.


Sec.  1.302-5  [Corrected]

    2. On page 64339, column 1, Sec.  1.302-5, paragraph (d)(8), line 4 
from the bottom of the paragraph ``accelerated inclusion date shall be 
made'' is corrected to read ``accelerated loss inclusion date shall be 
made''.
    3. On page 64339, column 3, Sec.  1.302-5, Example 4, line 3, the 
language ``any shares of corporation Y to K in Year 4'', is corrected 
to read ``any shares of corporation Y stock to K in Year 4''.
    4. On page 64340, column 3, lines 6 and 7, the language ``equal to 
PS's basis in the corporation Z stock, ($50 after application of 
section 301(c)(2)), is'', is corrected to read ``equal to PS's basis in 
the corporation Z stock ($50 after application of section 301(c)(2)) 
is''.


Sec.  1.304-3  [Corrected]

    5. On page 64342, column 3, Sec.  1.304-3, paragraph (a), lines 21 
through 24, the language ``For the treatment of the redeemed 
shareholder's basis in the redeemed stock in such cases, see Sec.  
1.302-5.'' is removed.

Cynthia E. Grigsby,
Chief, Regulations Unit, Associate Chief Counsel (Income Tax and 
Accounting).
[FR Doc. 02-32331 Filed 12-24-02; 8:45 am]
BILLING CODE 4830-01-P