Internal Revenue Service (IRS), Treasury.
This document contains corrections to final regulations (T.D. 9273,
2006-37 I.R.B. 394) that were published in the Federal
Register on Tuesday, August 8, 2006 (71 FR 44887) addressing the
carryover of certain tax attributes, such as earnings and profits and foreign
income tax accounts, when two corporations combine in a corporate reorganization
or liquidation that is described in both sections 367(b) and section 381 of
the Internal Revenue Code.
The correction is effective August 8, 2006.
FOR FURTHER INFORMATION CONTACT:
Jeffrey L. Parry, (202) 622-3850 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
The final regulations that are the subject of this correction are under
sections 367(b) and 381 of the Internal Revenue Code.
As published, final regulations (T.D. 9273) contain errors that may
prove to be misleading and are in need of clarification.
* * * * *
Correction of Publication
Accordingly, 26 CFR part 1 is corrected by making the following correcting
amendments:
Paragraph 1. The authority citation for part 1 continues to read, in
part, as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 7. Section 1.367(b)-7(f)(1)(iii) Example 1 (iii)
is amended by revising the last sentence of paragraph (A) and paragraph (B)
to read as follows:
§ 1.367(b)-7 Carryover of earnings and profits
and foreign income taxes in certain foreign-to-foreign non-recognition transactions.
* * * * *
(f) * * *
(1) * * *
(iii) * * *
Example (1) * * *
(A) * * * The 100u offset under section 952(c)(1)(B) does not result
in a reduction of the hovering deficit for purposes of section 316 or section
902.
(B) Foreign surviving corporation A’s 100u of subpart F income
not included in income by USP will accumulate and be added to its post-1986
undistributed earnings as of the beginning of 2009. This 100u of post-transaction
earnings will be offset by the (100u) hovering deficit. Because the amount
of earnings offset by the hovering deficit is 100% of the total amount of
the hovering deficit, all $25 of the related taxes are added to the post-1986
foreign income taxes pool as well. Accordingly, foreign surviving corporation
A has the following post-1986 undistributed earnings and post-1986 foreign
income taxes on January 1, 2009:
* * * * *
LaNita Van Dyke,
Chief,
Publications and Regulations Branch,
Legal Processing Division,
Associate
Chief Counsel
(Procedure and Administration).
Note
(Filed by the Office of the Federal Register on December 6, 2006, 8:45
a.m., and published in the issue of the Federal Register for December 7, 2006,
71 F.R. 70875)
You can either: Search all IRS Bulletin Documents issued since January 1996, or Search the entire site. For a more focused search, put your search word(s) in quotes.
