[Federal Register Volume 82, Number 247 (Wednesday, December 27, 2017)]
[Rules and Regulations]
[Pages 61177-61178]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27862]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9825]
RIN 1545-BJ08


Treatment of Transactions in Which Federal Financial Assistance 
Is Provided; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

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SUMMARY: This document contains corrections to final regulations (TD 
9825) that were published in the Federal Register on Thursday, October 
19, 2017. The final regulations are under section 597 of the Internal 
Revenue Code. These final regulations amend existing regulations that 
address the federal income tax treatment of transactions in which 
federal financial assistance is provided to banks and domestic building 
and loan associations, and they clarify the federal income tax 
consequences of those transactions to banks, domestic building and loan 
associations, and related parties.

DATES: This correction is effective on December 27, 2017 and is 
applicable on or after October 19, 2017.

FOR FURTHER INFORMATION CONTACT: Russell G. Jones at (202) 317-5357, or 
Ken Cohen at (202) 317-5367 (not toll-free numbers).

SUPPLEMENTARY INFORMATION: 

Background

    The final regulations (TD 9825) that are the subject of this 
correction are issued under section 597 of the Internal Revenue Code.

Need for Correction

    As published, the final regulations (TD 9825) contain 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

    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 1.597-5 is amended by revising the seventh and eighth 
sentences of paragraph (f), Example 4, and by revising the first and 
second sentences of paragraph (f), Example 5 (ii), to read as follows:


Sec.  1.597-5   Taxable Transfers.

* * * * *
    (f) * * *
    Example 4.  * * * The fair market value of the loans is their 
Expected Value, $800,000 (the sum of the $500,000 Third-Party Price 
and the $300,000 that the Agency would pay if N sold the loans for 
$500,000). The fair market value of each foreclosed property is its 
Expected Value, $80,000 (the sum of the $50,000 Third-Party Price 
and the $30,000 that the Agency would pay if N sold the

[[Page 61178]]

foreclosed property for $50,000) under paragraph (b) of Sec.  1.597-
1. * * *
* * * * *
    Example 5.  * * *
    (ii) At the end of 2018, the Third-Party Price for the loans 
drops to $400,000, and the Third-Party Price for each of the 
foreclosed properties remains at $50,000. The fair market value of 
the loans at the end of Year 2 is their Expected Value, $600,000 
($400,000 Third-Party Price + $200,000 (the amount of the loss if 
the loans were disposed of for the Third-Party Price x 33.33%) (the 
Average Reimbursement Rate does not change)). * * *
* * * * *

Martin V. Franks,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel, (Procedure and Administration).
[FR Doc. 2017-27862 Filed 12-26-17; 8:45 am]
 BILLING CODE 4830-01-P