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Guidance Under Section 1502; Amendment of Matching Rule for Certain Gains on Member Stock; Correction

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Information about this document as published in the Federal Register.

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This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

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Internal Revenue Service (IRS), Treasury.


Correcting amendment.


This document describes correcting amends to final and temporary regulations concerning the treatment of certain intercompany gain with respect to stock owned by members of a consolidated group. These regulations provide for the redetermination of intercompany gain as excluded from gross income in certain transactions involving stock transfers between members of a consolidated group. These errors were made when the agency published final and temporary regulations (TD 9515) in the Federal Register on Friday, March 4, 2011 (76 FR 11956).


This correction is effective on March 31, 2011, and is applicable on March 4, 2011.

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John F. Tarrant, (202) 622-7790 or Lawrence M. Axelrod, (202) 622-7713 (not toll-free numbers).

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The final and temporary regulations (TD 9515) that are the subject of this document are under section 1502 of the Internal Revenue Code.

Need for Correction

As published, the final and temporary regulations (TD 9515) contain errors that may prove to be misleading and are in need of clarification.

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List of Subjects in 26 CFR Part 1

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Correction of Publication

Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:

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Authority: 26 U.S.C. 7805. * * *

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Intercompany transactions.
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(c) * * *

(6) * * *

(ii) * * *

(C) * * *

(2) Effect on earnings and profits and investment adjustments. Any amount excluded from gross income under paragraph (c)(6)(ii)(C)(1) of this section shall not be taken into account as earnings and profits of any member and shall not be treated as tax-exempt income under § 1.1502-32(b)(2)(ii).

(D) Other amounts. (1) The Commissioner may determine that treating S's intercompany item as excluded from gross income is consistent with the purposes of this section and other applicable provisions of the Internal Revenue Code, regulations, and published guidance, if the following conditions are met, depending on whether the intercompany item is an item of income or an item of gain:

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Intercompany transactions (temporary).
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(f) * * *

(5) * * *

(ii) * * *

(F) * * *

(2) Prior periods. For transactions in which old T's liquidation into B occurs before October 25, 2007, see § 1.1502-13(f)(5)(ii)(B)(1) and (f)(5)(ii)(B)(2) in effect prior to October 25, 2007, as contained in 26 CFR part 1, revised April 1, 2009.

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LaNita Van Dyke,

Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration).

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[FR Doc. 2011-7506 Filed 3-30-11; 8:45 am]