[Federal Register Volume 85, Number 162 (Thursday, August 20, 2020)]
[Rules and Regulations]
[Pages 51346-51347]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-16354]


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

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9614]
RIN 1545-AM97


Certain Outbound Property Transfers by Domestic Corporations; 
Certain Stock Distributions by Domestic Corporations; Correcting 
Amendment

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendments.

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

[[Page 51347]]

SUMMARY: This document contains a correction to a Treasury Decision 
9614, which was published in the Federal Register on Tuesday, March 19, 
2013. Treasury Decision 9614 contained final regulations that apply to 
transfers of certain property by a domestic corporation to a foreign 
corporation in certain nonrecognition exchanges, or to distributions of 
stock of certain foreign corporations by a domestic corporation in 
certain nonrecognition distributions.

DATES: 
    Effective date: These corrections are effective on August 20, 2020.
    Applicability date: March 19, 2013.

FOR FURTHER INFORMATION CONTACT: Logan M. Kincheloe at (202) 317-6937 
(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    The final regulations (TD 9614) that are the subject of this 
correction are issued under section 367 of the Internal Revenue Code.

Need for Correction

    As published on March 19, 2013 (53 FR 17024), the final regulations 
(TD 9614; FR Doc. 2013-05700), contained 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 1.367(a)-3 is amended by adding paragraph (g)(1)(v)(A) 
and (B) to read as follows:


Sec.  1.367(a)-3  Treatment of transfers of stock or securities to 
foreign corporations.

* * * * *
    (g) * * *
    (1) * * *
    (v) * * *
    (A) Except as provided in paragraphs (g)(1)(v)(B) of this section 
and Sec.  1.367(a)-3T(g)(1)(ix), the rules of paragraph (d)(2)(vi) of 
this section apply only to transactions occurring on or after January 
23, 2006. See Sec.  1.367(a)-3(d)(2)(vi), as contained in 26 CFR part 1 
revised as of April 1, 2005, for transactions occurring on or after 
July 20, 1998, and before January 23, 2006.
    (B)(1) For purposes of paragraph (d)(2)(vi)(B)(1) of this section 
as contained in 26 CFR part 1 revised as of April 1, 2007, except as 
provided in paragraph (g)(1)(v)(B)(3) of this section, the following 
conditions must be satisfied for transactions occurring on or after 
December 28, 2007, and before March 18, 2013: The conditions and 
requirements of section 367(a)(5) and paragraph (g)(1)(v)(B)(2) of this 
section must be satisfied with respect to the domestic acquired 
corporation's transfer of assets to the foreign acquiring corporation 
and those conditions and requirements apply before the application of 
the exception under paragraph (d)(2)(vi)(B)(1) of this section as 
contained in 26 CFR part 1 revised as of April 1, 2007.
    (2) The domestic acquired corporation is controlled (within the 
meaning of section 368(c)) by five or fewer (but at least one) domestic 
corporations (controlling domestic corporations) immediately before the 
reorganization, appropriate basis adjustments under section 367(a)(5) 
are made to the stock received by the controlling domestic corporations 
in the reorganization, and any other conditions as provided in 
regulations under section 367(a)(5) are satisfied. For purposes of 
determining whether the domestic acquired corporation is controlled by 
five or fewer domestic corporations, all members of the same affiliated 
group within the meaning of section 1504 are treated as one 
corporation. Any adjustments to stock basis required under section 
367(a)(5) must be made to the stock received by the controlling 
domestic corporation in the reorganization so the appropriate amount of 
built-in gain in the property transferred by the domestic acquired 
corporation to the foreign acquiring corporation in the section 361 
exchange is reflected in the stock received. The basis adjustment 
requirement cannot be satisfied by adjusting the basis in stock of the 
foreign acquiring corporation held by the controlling domestic 
corporation before the reorganization. To the extent the appropriate 
amount of built-in gain in the property transferred by the domestic 
acquired corporation to the foreign acquiring corporation in the 
section 361 exchange cannot be preserved in the stock received by the 
controlling domestic corporation in the reorganization, the domestic 
acquired corporation's transfer of property to the foreign acquiring 
corporation is subject to section 367(a) and (d).
    (3) For transactions occurring on or after August 19, 2008, and 
before March 18, 2013, the following condition also applies: To the 
extent any of the retransferred assets constitute property to which 
section 367(d) applies, the exception under paragraph (d)(2)(iv)(B)(1) 
of this section, as contained in 26 CFR part 1 revised as of April 1, 
2007, applies only if the property to which section 367(d) applies is 
treated as property subject to section 367(a) for purposes of 
satisfying the conditions and requirements of section 367(a)(5).
* * * * *


Sec.  1.367(a)-7   [Amended]

0
Par. 3. In Sec.  1.367(a)-7 amend paragraph (f)(10) by removing ``Sec.  
1.367(a)-1T(d)(4)'' and adding in its place ``Sec.  1.367(a)-1(d)(4)''.

Martin V. Franks,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel, (Procedure and Administration).
[FR Doc. 2020-16354 Filed 8-19-20; 8:45 am]
BILLING CODE 4830-01-P