This PDF is the current document as it appeared on Public Inspection on 11/16/2016 at 08:45 am.
Internal Revenue Service (IRS), Treasury.
This document contains corrections to final and temporary regulations (TD 9788) that were published in the Federal Register on Wednesday, October 5, 2016 (81 FR 69282). The final and temporary regulations provide rules concerning how liabilities are allocated for purposes of section 707 of the Internal Revenue Code and when certain obligations are recognized for purposes of determining whether a liability is a recourse partnership liability under section 752.
This correction is effective November 17, 2016 and is applicable on and after January 3, 2017.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Caroline E. Hay or Deane M. Burke (202) 317-5279 (not a toll-free number).End Further Info End Preamble Start Supplemental Information
The final and temporary regulations (TD 9788) that are the subject of this correction are under sections 707 and 752 of the Internal Revenue Code.
Need for Correction
As published, the final and temporary regulations (TD 9788) contain errors that may prove to be misleading and are in need of clarification.Start List of Subjects
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:Start Part Start Printed Page 80994
PART 1—INCOME TAXESEnd Part Start Amendment Part
Paragraph 1. The authority citation for part 1 continues to read in part as follows:End Amendment Part
Section 1.707-5T also issued under 26 U.S.C. 707(a)(2)(B).Start Amendment Part
Par. 2. Section 1.707-5T is amended by revising paragraph (a)(2)(i); and paragraph (f) Example 7 (i) is amended by revising the second to last sentence. The revisions read as follows:End Amendment Part
(a) * * *
(2) * * *
(i) In general. For purposes of § 1.707-5, a partner's share of a liability of a partnership, as defined in § 1.752-1(a) (whether a recourse liability or a nonrecourse liability) is determined by applying the same percentage used to determine the partner's share of the excess nonrecourse liability under § 1.752-3(a)(3) (as limited in its application to this paragraph (a)(2)), but such share shall not exceed the partner's share of the partnership liability under section 752 and applicable regulations (as limited in the application of § 1.752-3(a)(3) to this paragraph (a)(2)).
(f) * * *
Example 7. * * *
(i) * * * For disguised sale purposes, assume that G's and H's share of liability 1 is $2,000 each in accordance with paragraph (a)(2) of this section (which determines a partner's share of a liability using the percentage under § 1.752-3(a)(3), but not exceeding the partner's share of the liability under section 752 and applicable regulations). * * *
Martin V. Franks,
Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel, (Procedure and Administration).
[FR Doc. 2016-27517 Filed 11-16-16; 8:45 am]
BILLING CODE 4830-01-P