[Federal Register Volume 84, Number 126 (Monday, July 1, 2019)]
[Rules and Regulations]
[Page 31194]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13615]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9857]
RIN 1545-BL11


Recognition and Deferral of Section 987 Gain or Loss; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendments.

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SUMMARY: This document contains corrections to final regulations (TD 
9857) that were published in the Federal Register on Monday, May 13, 
2019. The final regulations are relating to combinations and 
separations of qualified business units (QBUs) subject to section 987 
and the recognition and deferral of foreign currency gain or loss with 
respect to a QBU subject to section 987 in connection with certain QBU 
terminations and certain other transactions involving partnerships.

DATES: This correction is effective on July 1, 2019.

FOR FURTHER INFORMATION CONTACT: Steven D. Jensen at (202) 317-6938 
(not a toll-free number).

SUPPLEMENTARY INFORMATION: 

Background

    The final regulations (TD 9857) that are the subject of this 
correction are issued under section 987 of the Internal Revenue Code.

Need for Correction

    As published May 13, 2019 (84 FR 20790) the final regulations (TD 
9857) contain errors that need to be corrected.

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 1.987-0 is amended by revising the entries of the table 
of contents for Sec.  1.987-12(b) and (j) to read as follows:


Sec.  1.987-0  Table of contents.

* * * * *


Sec.  1.987-12  Deferral of section 987 gain or loss.

* * * * *
    (b) Gain and loss recognition in connection with a deferral event.
* * * * *
    (j) Applicability date.
* * * * *

0
Par. 3. Section 1.987-2 is amended by revising the fifth sentence of 
paragraph (c)(9)(iii) and revising paragraph (e)(1) to read as follows:


Sec.  1.987-2   Attribution of items to eligible QBUs; definition of a 
transfer and related rules.

* * * * *
    (c) * * *
    (9) * * *
    (iii) * * * A separation may also result when a section 987 QBU 
that is subject to a grouping election under Sec.  1.987-1(b)(2)(ii) 
changes its functional currency. * * *
* * * * *
    (e) * * *
    (1) In general. Except as set forth in paragraph (e)(2) of this 
section, this section is applicable as specified in Sec.  1.987-11.
* * * * *

0
Par. 4. Section 1.987-4 is amended by revising the third sentence of 
paragraph (f)(2) to read as follows:


Sec.  1.987-4  Determination of net unrecognized section 987 gain or 
loss of a section 987 QBU.

* * * * *
    (f) * * *
    (2) * * * For purposes of determining the owner functional currency 
net value of the separated QBUs on the last day of the taxable year 
preceding the taxable year of separation under paragraphs (d)(1)(B) and 
(e) of this section, the balance sheets of the separated QBUs on that 
day will be deemed to reflect the assets and liabilities reflected on 
the balance sheet of the separating QBU on that day, apportioned 
between the separated QBUs in a reasonable manner that takes into 
account the assets and liabilities reflected on the balance sheets of 
the separated QBUs immediately after the separation. * * *
* * * * *

Martin V. Franks,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel (Procedure and Administration).
[FR Doc. 2019-13615 Filed 6-28-19; 8:45 am]
 BILLING CODE 4830-01-P