TIPRA Amendments to Section 199; Correction, 70876-70877 [E6-20724]
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70876
Federal Register / Vol. 71, No. 235 / Thursday, December 7, 2006 / Rules and Regulations
(f) * * *
(1) * * *
(iii) * * *
Correction of Publication
FOR FURTHER INFORMATION CONTACT:
Jeffrey L. Parry, (202) 622–3850 (not a
toll-free number).
Accordingly, 26 CFR part 1 is
corrected by making the following
correcting amendments:
n
SUPPLEMENTARY INFORMATION:
Background
PART 1—INCOME TAXES
The final regulations that are the
subject of this correction are under
sections 367(b) and 381 of the Internal
Revenue Code.
n
Need for Correction
Paragraph 1. The authority citation
for part 1 continues to read, in part, as
follows:
Authority: 26 U.S.C. 7805 * * *
Par. 7. Section 1.367(b)–7(f)(1)(iii)
Example 1 (iii) is amended by
revising the last sentence of paragraph
(A) and paragraph (B) to read as follows:
n
As published, final regulations (TD
9273) 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.
§ 1.367(b)–7 Carryover of earnings and
profits and foreign income taxes in certain
foreign-to-foreign non-recognition
transactions.
*
*
*
*
*
Example 1 * * *
(A) * * * The 100u offset under section
952(c)(1)(B) does not result in a reduction of
the hovering deficit for purposes of section
316 or section 902.
(B) Foreign surviving corporation A’s 100u
of subpart F income not included in income
by USP will accumulate and be added to its
post-1986 undistributed earnings as of the
beginning of 2009. This 100u of posttransaction earnings will be offset by the
(100u) hovering deficit. Because the amount
of earnings offset by the hovering deficit is
100% of the total amount of the hovering
deficit, all $25 of the related taxes are added
to the post-1986 foreign income taxes pool as
well. Accordingly, foreign surviving
corporation A has the following post-1986
undistributed earnings and post-1986 foreign
income taxes on January 1, 2009:
Earnings & profits
Foreign taxes
Separate category
Positive
E&P
Hovering
deficit
Foreign
taxes
available
Foreign
taxes associated with
hovering
deficit
General ............................................................................................................................
0u
(0u)
$45
$0
*
*
*
*
*
LaNita Van Dyke,
Chief, Publications and Regulations Branch,
Legal Processing Division, Associate Chief
Counsel (Procedure and Administration).
[FR Doc. E6–20728 Filed 12–6–06; 8:45 am]
BILLING CODE 4830–01–P
FOR FURTHER INFORMATION CONTACT:
Concerning §§ 1.199–2T(e)(2) and
1.199–8T(i)(5), Paul Handleman or
Lauren Ross Taylor, (202) 622–3040;
concerning §§ 1.199–3T(i)(7) and (8),
and 1.199–5T, Martin Schaffer, (202)
622–3080; and concerning §§ 1.199–
7T(b)(4) and 1.199–8T(i)(6), Ken Cohen,
(202) 622–7790 (not toll-free numbers).
DEPARTMENT OF THE TREASURY
SUPPLEMENTARY INFORMATION:
Internal Revenue Service
Background
The final and temporary regulations
that are the subject of this correction are
under section 199 of the Internal
Revenue Code.
26 CFR Part 1
[TD 9293]
RIN 1545–BF88
Need for Correction
TIPRA Amendments to Section 199;
Correction
sroberts on PROD1PC70 with RULES
AGENCY: Internal Revenue Service (IRS),
Treasury.
ACTION: Correcting amendments.
SUMMARY: This document contains
corrections to final and temporary
regulations (TD 9293) that were
published in the Federal Register on
Thursday, October 19, 2006 (71 FR
61662) concerning the amendments
made by the Tax Increase Prevention
and Reconciliation Act of 2005 to
section 199 of the Internal Revenue
Code.
DATES: This correction is effective
October 19, 2006.
VerDate Aug<31>2005
20:43 Dec 06, 2006
Jkt 211001
As published, final and temporary
regulations (TD 9293) 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
Accordingly, 26 CFR part 1 is
corrected by making the following
amendments:
n
Paragraph 1. The authority citation
for part 1 is amended by adding entries
PO 00000
Frm 00022
Fmt 4700
Sfmt 4700
Authority: 26 U.S.C. 7805 * * *
Section 1.199–5T also issued under 26
U.S.C. 199(d). * * *
Section 1.199–7T also issued under 26
U.S.C. 199(d). * * *
Par. 4. Section 1.199–2T(e)(2) is
amended by revising the eleventh
sentence of Example 2 paragraph (i) and
the seventh sentence of Example 5
paragraph (iv) to read as follows:
n
§ 1.199–2T
Wage limitation (temporary).
Example 2. * * *
(i) * * * For Y’s taxable year ending April
30, 2011, the total square footage of Y’s
headquarters is 8,000 square feet, of which
2,000 square feet is set aside for domestic
production activities. * * *
Example 5. * * *
(iv) * * * The EAG’s tentative section 199
deduction is $360,000 (.09 × (lesser of
combined QPAI of $4,000,000 (B’s QPAI of
$4,000,000 + S’s QPAI of $0) or combined
taxable income of $4,200,000 (B’s taxable
income of $4,000,000 + S’s taxable income of
$200,000))) subject to the W–2 wage
limitation of $50,000 (50% × ($100,000 (B’s
W–2 wages) + $0 (S’s W–2 wages))). * * *
Par. 8. Section 1.199–5T is amended
by revising sentences eight through ten
of paragraph (e)(4)(ii)(A) and revising
paragraph (g) to read as follows:
n
PART 1—INCOME TAXES
n
in numerical order to read in part as
follows:
E:\FR\FM\07DER1.SGM
07DER1
Federal Register / Vol. 71, No. 235 / Thursday, December 7, 2006 / Rules and Regulations
sroberts on PROD1PC70 with RULES
§ 1.199–5T Application of section 199 to
pass-thru entities for taxable years
beginning after May 17, 2006, the enactment
date of the Tax Increase Prevention and
Reconciliation Act of 2005 (temporary).
(e) * * *
(4) * * *
(ii) * * *
(A) * * * In this step, in this
example, the portion of the trustee
commissions not directly attributable to
the rental operation ($2,000) is directly
attributable to non-trade or business
activities. In addition, the state income
and personal property taxes are not
directly attributable under § 1.652(b)–
3(a) to either trade or business or nontrade or business activities, so the
portion of those taxes not attributable to
either the PRS interests or the rental
operation is not a trade or business
expense and, thus, is not taken into
account in computing QPAI. The
portion of the state income and personal
property taxes that is treated as an other
trade or business expense is $3,000
($5,000 × $30,000 total trade or business
gross receipts/$50,000 total gross
receipts). * * *
*
*
*
*
*
(g) No attribution of qualified
activities. Except as provided in
§ 1.199–3T(i)(7) regarding qualifying inkind partnerships and § 1.199–3T(i)(8)
regarding EAG partnerships, an owner
of a pass-thru entity is not treated as
conducting the qualified production
activities of the pass-thru entity, and
vice versa. This rule applies to all
partnerships, including partnerships
that have elected out of subchapter K
under section 761(a). Accordingly, if a
partnership manufactures QPP within
the United States, or produces a
qualified film or produces utilities in
the United States, and distributes or
leases, rents, licenses, sells, exchanges,
or otherwise disposes of such property
to a partner who then, without
performing its own qualifying activity,
leases, rents, licenses, sells, exchanges,
or otherwise disposes of such property,
then the partner’s gross receipts from
this latter lease, rental, license, sale,
exchange, or other disposition are
treated as non-DPGR. In addition, if a
partner manufactures QPP within the
United States, or produces a qualified
film or produces utilities in the United
States, and contributes or leases, rents,
licenses, sells, exchanges, or otherwise
disposes of such property to a
partnership which then, without
performing its own qualifying activity,
leases, rents, licenses, sells, exchanges,
or otherwise disposes of such property,
then the partnership’s gross receipts
VerDate Aug<31>2005
20:43 Dec 06, 2006
Jkt 211001
from this latter disposition are treated as
non-DPGR.
*
*
*
*
*
LaNita Van Dyke,
Chief, Publications and Regulations Branch,
Legal Processing Division, Associate Chief
Counsel (Procedure and Administration).
[FR Doc. E6–20724 Filed 12–6–06; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
70877
Par. 2. Section 1.704–1 is amended by
revising instructional Par. 2, number 2
to read as follows:
1. * * *
2. The heading and text of paragraphs
(b)(1)(ii)(b), and (b)(5) Examples 25
through 27 are revised.
*
*
*
*
*
n Par. 3. Section 1.704–1(d)(5) is
amended by revising Example 25
paragraph (ii), the ninth sentence and
Example 26 paragraph (ii), the eighth
sentence to read as follows:
n
§ 1.704–1
Partner’s distributive share.
26 CFR Part 1
*
*
[TD 9292]
Example 25. * * *
(ii) * * * Accordingly, the country X taxes
will be reallocated according to the partners’
interests in the partnership.
Example 26. * * *
(ii) * * * Because AB’s partnership
agreement allocates the $80,000 of country X
taxes and $40,000 of country Y taxes in
proportion to the distributive shares of
income to which such taxes relate, the
allocations are deemed to be in accordance
with the partners’ interests in the partnership
under paragraph (b)(4)(viii) of this section.
RIN 1545–BB11
Partner’s Distributive Share: Foreign
Tax Expenditures; Correction
AGENCY: Internal Revenue Service (IRS),
Treasury.
ACTION: Correcting amendments.
SUMMARY: This document contains
correction to final regulations (TD 9292)
that were published in the Federal
Register on Thursday, October 19, 2006
(71 FR 61648) regarding the allocation
of creditable foreign tax expenditures by
partnerships.
DATES: The correction is effective
October 19, 2006.
FOR FURTHER INFORMATION CONTACT:
Timothy J. Leska, (202) 622–3050 or
Michael I. Gilman (202) 622–3850 (not
toll-free numbers).
SUPPLEMENTARY INFORMATION:
*
*
*
*
*
*
*
*
LaNita Van Dyke,
Chief, Publications and Regulations Branch,
Legal Processing Division, Associate Chief
Counsel (Procedure and Administration).
[FR Doc. E6–20722 Filed 12–6–06; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF HOMELAND
SECURITY
Background
The correction notice that is the
subject of this document is under
section 704 of the Internal Revenue
Code.
Coast Guard
Need for Correction
As published, final regulations (TD
9292) contain errors that may prove to
be misleading and are in need of
clarification.
Drawbridge Operation Regulations;
Arkansas Waterway, Arkansas
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
SUMMARY: The Coast Guard is revising
the drawbridge operations for the Rob
Roy Drawbridge across the Arkansas
Waterway at Mile 67.4 at Pine Bluff,
Arkansas, the Baring Cross Railroad
Drawbridge across the Arkansas
Waterway at Mile 119.6 at Little Rock,
Arkansas, and the Van Buren Railroad
Drawbridge across the Arkansas
Waterway at Mile 300.8 at Van Buren,
Arkansas, to reflect the actual
procedures currently being followed. In
addition, the following three bridges
will be removed from 33 CFR 117.123
as they are locked in the open-to-
Correction of Publication
Accordingly, 26 CFR part 1 is
corrected by making the following
correcting amendments:
n
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 continues to read, in part, as
follows:
n
Authority: 26 U.S.C. 7805 * * *
PO 00000
Frm 00023
Fmt 4700
Sfmt 4700
33 CFR Part 117
[CGD08–06–005]
RIN 1625–AA09
AGENCY: Coast Guard, DHS.
ACTION: Final rule.
E:\FR\FM\07DER1.SGM
07DER1
]]>Agencies
[Federal Register Volume 71, Number 235 (Thursday, December 7, 2006)]
[Rules and Regulations]
[Pages 70876-70877]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-20724]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9293]
RIN 1545-BF88
TIPRA Amendments to Section 199; Correction
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Correcting amendments.
-----------------------------------------------------------------------
SUMMARY: This document contains corrections to final and temporary
regulations (TD 9293) that were published in the Federal Register on
Thursday, October 19, 2006 (71 FR 61662) concerning the amendments made
by the Tax Increase Prevention and Reconciliation Act of 2005 to
section 199 of the Internal Revenue Code.
DATES: This correction is effective October 19, 2006.
FOR FURTHER INFORMATION CONTACT: Concerning Sec. Sec. 1.199-2T(e)(2)
and 1.199-8T(i)(5), Paul Handleman or Lauren Ross Taylor, (202) 622-
3040; concerning Sec. Sec. 1.199-3T(i)(7) and (8), and 1.199-5T,
Martin Schaffer, (202) 622-3080; and concerning Sec. Sec. 1.199-
7T(b)(4) and 1.199-8T(i)(6), Ken Cohen, (202) 622-7790 (not toll-free
numbers).
SUPPLEMENTARY INFORMATION:
Background
The final and temporary regulations that are the subject of this
correction are under section 199 of the Internal Revenue Code.
Need for Correction
As published, final and temporary regulations (TD 9293) 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
amendments:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 is amended by adding
entries in numerical order to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.199-5T also issued under 26 U.S.C. 199(d). * * *
Section 1.199-7T also issued under 26 U.S.C. 199(d). * * *
0
Par. 4. Section 1.199-2T(e)(2) is amended by revising the eleventh
sentence of Example 2 paragraph (i) and the seventh sentence of Example
5 paragraph (iv) to read as follows:
Sec. 1.199-2T Wage limitation (temporary).
Example 2. * * *
(i) * * * For Y's taxable year ending April 30, 2011, the total
square footage of Y's headquarters is 8,000 square feet, of which
2,000 square feet is set aside for domestic production activities. *
* *
Example 5. * * *
(iv) * * * The EAG's tentative section 199 deduction is $360,000
(.09 x (lesser of combined QPAI of $4,000,000 (B's QPAI of
$4,000,000 + S's QPAI of $0) or combined taxable income of
$4,200,000 (B's taxable income of $4,000,000 + S's taxable income of
$200,000))) subject to the W-2 wage limitation of $50,000 (50% x
($100,000 (B's W-2 wages) + $0 (S's W-2 wages))). * * *
0
Par. 8. Section 1.199-5T is amended by revising sentences eight through
ten of paragraph (e)(4)(ii)(A) and revising paragraph (g) to read as
follows:
[[Page 70877]]
Sec. 1.199-5T Application of section 199 to pass-thru entities for
taxable years beginning after May 17, 2006, the enactment date of the
Tax Increase Prevention and Reconciliation Act of 2005 (temporary).
(e) * * *
(4) * * *
(ii) * * *
(A) * * * In this step, in this example, the portion of the trustee
commissions not directly attributable to the rental operation ($2,000)
is directly attributable to non-trade or business activities. In
addition, the state income and personal property taxes are not directly
attributable under Sec. 1.652(b)-3(a) to either trade or business or
non-trade or business activities, so the portion of those taxes not
attributable to either the PRS interests or the rental operation is not
a trade or business expense and, thus, is not taken into account in
computing QPAI. The portion of the state income and personal property
taxes that is treated as an other trade or business expense is $3,000
($5,000 x $30,000 total trade or business gross receipts/$50,000 total
gross receipts). * * *
* * * * *
(g) No attribution of qualified activities. Except as provided in
Sec. 1.199-3T(i)(7) regarding qualifying in-kind partnerships and
Sec. 1.199-3T(i)(8) regarding EAG partnerships, an owner of a pass-
thru entity is not treated as conducting the qualified production
activities of the pass-thru entity, and vice versa. This rule applies
to all partnerships, including partnerships that have elected out of
subchapter K under section 761(a). Accordingly, if a partnership
manufactures QPP within the United States, or produces a qualified film
or produces utilities in the United States, and distributes or leases,
rents, licenses, sells, exchanges, or otherwise disposes of such
property to a partner who then, without performing its own qualifying
activity, leases, rents, licenses, sells, exchanges, or otherwise
disposes of such property, then the partner's gross receipts from this
latter lease, rental, license, sale, exchange, or other disposition are
treated as non-DPGR. In addition, if a partner manufactures QPP within
the United States, or produces a qualified film or produces utilities
in the United States, and contributes or leases, rents, licenses,
sells, exchanges, or otherwise disposes of such property to a
partnership which then, without performing its own qualifying activity,
leases, rents, licenses, sells, exchanges, or otherwise disposes of
such property, then the partnership's gross receipts from this latter
disposition are treated as non-DPGR.
* * * * *
LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division,
Associate Chief Counsel (Procedure and Administration).
[FR Doc. E6-20724 Filed 12-6-06; 8:45 am]
BILLING CODE 4830-01-P
