[Federal Register Volume 75, Number 43 (Friday, March 5, 2010)]
[Rules and Regulations]
[Page 10172]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-4756]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9424]
RIN 1545-BB61


Unified Rule for Loss on Subsidiary Stock; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

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SUMMARY: This document contains a correction to final regulations (TD 
9424) that were published in the Federal Register on Wednesday, 
September 17, 2008 (73 FR 53934).
    The regulations apply to corporations filing consolidated returns, 
and corporations that enter into certain tax-free reorganizations. The 
regulations provide rules for determining the tax consequences of a 
member's transfer (including by deconsolidation and worthlessness) of 
loss shares of subsidiary stock.

DATES: Effective Date: This correction is effective on March 5, 2010, 
and is applicable on September 17, 2008.

FOR FURTHER INFORMATION CONTACT: Maury Passman, (202) 622-7550 or 
Theresa Abell, (202) 622-7700 (not toll-free numbers).

SUPPLEMENTARY INFORMATION: 

Background

    The final regulations (TD 9424) that are the subject of this 
document are under sections 337, 358, 362 and 1502 of the Internal 
Revenue Code.

Need for Correction

    As published, the final regulations (TD 9424) contain an error that 
may prove to be misleading and is in need of clarification. The final 
regulations revised Sec.  1.1502-35(a) to provide that, in general, 
Sec.  1.1502-35 would only apply to transactions completed prior to 
September 17, 2008. The final regulations also revised the operative 
rules in Sec.  1.1502-35. However, the effective date prescribed in 
Sec.  1.1502-35(j) appeared to preclude the application of the revised 
Sec.  1.1502-35 to transactions completed prior to September 17, 2008. 
The final regulations are clarified to provide that the revised rules 
in Sec.  1.1502-35 (including the ten-year termination of application 
of Sec.  1.1502-35 described in Background section 2.A. of the 
preamble) apply after September 16, 2008, to all transactions subject 
to that section.

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 amendment:

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 1.1502-35 is amended by revising the first sentence of 
paragraph (j) to read as follows:


Sec.  1.1502-35  Transfers of subsidiary stock and deconsolidations of 
subsidiaries.

* * * * *
    (j) Effective/applicability dates. This section applies after 
September 16, 2008. * * *

LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel, (Procedure and Administration).
[FR Doc. 2010-4756 Filed 3-4-10; 8:45 am]
BILLING CODE 4830-01-P