The final regulations that are the subject of this document are under section 704 of the Internal Revenue Code.
As published, final regulations (TD 9398) 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:
PART 1—INCOME TAXES
Paragraph 1.
The authority citation for part 1 continues to read, in part, as follows:
Authority:
26 U.S.C. 7805 * * *
Par. 2.
Section 1.704–1 is amended as follows:
1. In paragraph (b)(2)(iii)(
d
)(
3
), the last sentence, the language “In the case of a controlled foreign corporation that is a look-through entity, the tax attributes to be taken into account are those of any person that is a United States shareholder (as defined in paragraph (b)(2)(iii)(d)(5) of this section) of the controlled foreign corporation, or, if the United States shareholder is a look-through entity, a United States person that owns an interest in such shareholder directly or indirectly through one or more look-through entities.” is removed and the language “In the case of a controlled foreign corporation that is a look-through entity, the tax attributes to be taken into account are those of any person that is a United States shareholder (as defined
in paragraph (b)(2)(iii)(
d
)(
5
) of this section) of the controlled foreign corporation, or, if the United States shareholder is a look-through entity, a United States person that owns an interest in such shareholder directly or indirectly through one or more look-through entities.” is added in its place.
2. In paragraph (b)(5)
Example 29
., the fourth sentence, the language “C is a partnership with two partners, E, an individual, and F, a corporation that is member of a consolidated group within the meaning of § 1.1502–1(h).” is removed and the language “C is a partnership with two partners, E, an individual, and F, a corporation that is a member of a consolidated group within the meaning of § 1.1502–1(h).” is added in its place.