Justia Regulation Tracker

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[Federal Register: November 14, 2008 (Volume 73, Number 221)]
[Rules and Regulations]               
[Page 67388-67389]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14no08-13]                         

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9428]
RIN 1545-BD72

 
Section 1367 Regarding Open Account Debt; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

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SUMMARY: This document contains corrections to final regulations (TD 
9428) that were published in the Federal Register on Monday, October 
20, 2008 (73 FR62199) relating to the treatment of open account debt 
between S corporations and their shareholders. These final regulations 
provide rules regarding the definition of open account debt and the 
adjustments in basis of any indebtedness of an S corporation to a 
shareholder under section 1367(b)(2) of the Internal Revenue Code for 
shareholder advances and repayments on advances of open account debt. 
The regulations affect shareholders of S corporations and are necessary 
to provide guidance needed to comply with the applicable tax law.

DATES: Effective Date: This correction is effective November 14, 2008, 
and is applicable on October 20, 2008.

FOR FURTHER INFORMATION CONTACT: Stacy L. Short or Deane M. Burke, 
(202) 622-3070 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    The final regulations that are the subjects of this document are 
under section 1367 of the Internal Revenue Code.

Need for Correction

    As published, final regulations (TD 9428) 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:

[[Page 67389]]

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

0
Par. 2. Section 1.1367-2(e) is amended by revising the title of 
paragraph Example 6.

and the first sentence of paragraph Example 7.(i) to read as follows:

Sec.  1.1367-2  Adjustments to basis of indebtedness to shareholder.

* * * * *
    (e) * * *

    Example 6. The $25,000 aggregate principal amount applies to 
each shareholder. * * *
* * * * *
    Example 7. * * *
    (i) The facts are the same as in Example 6, in addition to 
which, on December 31, 2009, A's basis in the open account debt is 
reduced under paragraph (b) of this section to $8,000. * * *

* * * * *

LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel (Procedure and Administration).
 [FR Doc. E8-27024 Filed 11-13-08; 8:45 am]

BILLING CODE 4830-01-P