[Federal Register Volume 71, Number 248 (Wednesday, December 27, 2006)]
[Proposed Rules]
[Pages 77654-77655]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-22169]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-208270-86]
RIN 1545-AM12


Income and Currency Gain or Loss With Respect to a Section 987 
QBU; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correction to notice of proposed rulemaking.

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SUMMARY: This document contains corrections to a notice of proposed 
rulemaking that was published in the Federal Register on Thursday, 
September 7, 2006 (71 FR 52876), regarding the determination of the 
items of income or loss of a taxpayer with respect to a section 987 
qualified business unit as well as the timing, amount, character and 
source of any section 987 gain or loss.

FOR FURTHER INFORMATION CONTACT: Sheila Ramaswamy, (202) 622-3870 (not 
a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    The notice of proposed rulemaking (REG-208270-86) that is the 
subject of these corrections is under section 987 of the Internal 
Revenue Code.

Need for Correction

    As published, the notice of proposed rulemaking (REG-208270-86) 
contains errors that may prove to be misleading and is in need of 
clarification.

Correction of Publication

    Accordingly, the notice of proposed rulemaking (REG-208270-86), 
that was the subject of FR Doc. 06-7250, is corrected as follows:
    1. On page 52879, second column, in the preamble under the 
paragraph heading ``E. Concerns Regarding the 1991 Proposed 
Regulations: Notice 2000-20,'' the sixteenth line following the 
formula, the language ``DE. The DE conducts mineral'' is corrected to 
read ``DE. The DE conducts mineral extraction in Country X''.
    2. On page 52886, first column, in the preamble under the paragraph 
heading ``C. Section 1.987-3 Determination of the Items of Section 987 
Taxable Income or Loss of an Owner of a Section 987 QBU,'' the eighth 
line, the language ``under other provisions are not taken'' is 
corrected to read ``under other provisions of the Code or regulations 
are not taken''.
    3. On page 52886, second column, under the paragraph heading ``C. 
Section 1.987-3 Determination of the Items of Section 987 Taxable 
Income or Loss of an Owner of a Section 987 QBU,'' first full 
paragraph, ninth line from the bottom of the paragraph, the language 
``rates for amount realized and adjusted'' is corrected to read ``rates 
for the amount realized and adjusted''.
    4. On page 52886, second column, under the paragraph heading ``C. 
Section 1.987-3 Determination of the Items of Section 987 Taxable 
Income or Loss of an Owner of a Section 987 QBU,'' second full 
paragraph, fifth line, the language ``Generally the amount realized 
and'' is corrected to read ``Generally, the amount realized and 
adjusted''.


Sec.  1.987-1  [Corrected]

    5. On page 52895, second column, Sec.  1.987-1(b)(7), paragraph 
(ii)(B) of Example 1, fifth line from the bottom of the paragraph, the 
language ``neither the activities of DE1 or DE2 are'' is corrected to 
read ``the activities of DE1 are not''.


Sec.  1.987-2  [Corrected]

    6. On page 52899, first column, Sec.  1.987-2(c)(9), lines 2 and 3, 
the language ``illustrate the principles of this paragraph (c). For 
purposes of these'' is corrected to read ``illustrate the principles of 
paragraph (b) of this section and this paragraph (c). For purposes of 
these''.

[[Page 77655]]

    7. On page 52899, second column, Sec.  1.987-2(c)(9), paragraph 
(ii)(B) of Example 1, last line, the language ``section 988 to X as a 
result of the loan.'' is corrected to read ``section 988 to X as a 
result of the disregarded loan.''
    8. On page 52899, third column, Sec.  1.987-2(c)(9), paragraph 
(ii)(A) of Example 3, line 3, the language ``Federal tax purposes and 
therefore is a'' is corrected to read ``Federal income tax purposes and 
therefore is a''.
    9. On page 52900, first column, Sec.  1.987-2(c)(9), paragraph 
(ii)(C) of Example 4, line 3, the language ``regarded for U.S. Federal 
tax purposes. As a'' is corrected to read ``regarded for U.S. Federal 
income tax purposes. As a''.
    10. On page 52900, second column, Sec.  1.987-2(c)(9), paragraph 
(ii)(A) of Example 7, line 1, the language ``(ii) Analysis. (A) For 
Federal tax purposes'' is corrected to read ``(ii) Analysis. (A) For 
Federal income tax purposes''.
    11. On page 52901, third column, Sec.  1.987-2(d)(2), line 3, the 
language ``described in section 988(c)(1)(i) and (ii)'' is corrected to 
read ``described in section 988(c)(1)(B)(i) and (ii)''.


Sec.  1.987-3  [Corrected]

    12. On page 52902, third column, Sec.  1.987-3(e)(2), line 5, the 
language ``described in section 988(c)(1)(A)(i) and'' is corrected to 
read ``described in section 988(c)(1)(B)(i) and''.
    13. On page 52904, first column, Sec.  1.987-3(f) Example 3., the 
fourth line from the bottom of the paragraph, the language ``section 
and Sec.  1.987-1(c)(3) [euro]8,000 x $1='' is corrected to read 
``section and Sec.  1.987-1(c)(3) ([euro]8[n1],000 x $1=''.


Sec.  1.987-6  [Corrected]

    14. On page 52911, first column, Sec.  1.987-6(c) Example, lines 5 
through 10 from the bottom of the column, the language ``of this 
section, Sf7,500 (Sf750,000/Sf1,000,000 x Sf10,000) of the section 987 
gain will be treated as foreign source general limitation income which 
is not subpart F income and Sf2,500 (Sf250,000/Sf1,000,000 x Sf10,000) 
will'' is corrected to read ``of this section, Sf7,500 ((Sf750,000/
Sf1,000,000) x Sf10,000) of the section 987 gain will be treated as 
foreign source general limitation income which is not subpart F income 
and Sf2,500 ((Sf250,000/Sf1,000,000) x Sf10,000) will''.

Cynthia E. Grigsby,
Senior Federal Register Liaison Officer, Publications and Regulations 
Branch, Legal Processing Division, Associate Chief Counsel (Procedure 
and Administration).
 [FR Doc. E6-22169 Filed 12-26-06; 8:45 am]
BILLING CODE 4830-01-P