[Federal Register Volume 74, Number 27 (Wednesday, February 11, 2009)]
[Rules and Regulations]
[Pages 6828-6829]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-2828]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9442]
RIN 1545-BA11


Consolidated Returns; Intercompany Obligations; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

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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.

DATES: This correction is effective February 11, 2009, and is 
applicable on December 29, 2008.

[[Page 6829]]


FOR FURTHER INFORMATION CONTACT: Frances Kelly, (202) 622-7770 (not a 
toll-free number).

SUPPLEMENTARY 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

0
Accordingly, 26 CFR part 1 is corrected by making the following 
correcting amendments:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

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

0
Par. 2. Section 1.1502-13 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.  1.1502-13  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 higher-tier member 
other than a higher-tier member of an 80-percent 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 80-percent chain; and 
all of the stock of the transferee (or in the case of successive 
section 351 exchanges, the lowest-tier 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. E9-2828 Filed 2-10-09; 8:45 am]
BILLING CODE 4830-01-P