Justia Regulation Tracker

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[Federal Register: June 12, 2008 (Volume 73, Number 114)]
[Rules and Regulations]               
[Page 33301-33302]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12jn08-12]                         

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9398]
RIN 1545-BD70

 
Partner's Distributive Share; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendments.

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SUMMARY: This document contains corrections to final regulations (TD 
9398) that were published in the Federal Register on Monday, May 19, 
2008 (73 FR 28699) providing rules for testing whether the economic 
effect of an allocation is substantial within the meaning of section 
704(b) where partners are look-through entities or members of a 
consolidated group. The final regulations clarify the application of 
section 704(b) to partnerships the interests of which are owned by 
look-through entities and members of consolidated groups and, through 
an example, reiterate the effect of other provisions of the Internal 
Revenue Code on partnership allocations.

DATES: This correction is effective June 12, 2008, and is applicable on 
May 19, 2008.

FOR FURTHER INFORMATION CONTACT: Jonathan E. Cornwell and Kevin I. 
Babitz at (202) 622-3050 (not a toll-free number).

SUPPLEMENTARY INFORMATION: 

Background

    The final regulations that are the subject of this document are 
under section 704 of the Internal Revenue Code.

Need for Correction

    As published, final regulations (TD 9398) contain errors that may 
prove to be misleading and are in need of clarification.

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 amendments:

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 1.704-1 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

[[Page 33302]]

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 Sec.  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 Sec.  
1.1502-1(h).'' is added in its place.

LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel, (Procedure and Administration).
[FR Doc. E8-13247 Filed 6-11-08; 8:45 am]

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