Section 482; Methods To Determine Taxable Income in Connection With a Cost Sharing Arrangement; Correction, 8143-8144 [2012-3351]
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Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / Rules and Regulations
shareholder takes the related income
into account.
(10) Distributions of previously-taxed
earnings and profits. Distributions and
deemed distributions described in
paragraph (d) of this section (including
in the case of a section 902 shareholder
that has chosen the alternative method
described in paragraph (d)(4) of this
section) do not include distributions of
amounts described in section 959(c)(1)
or (c)(2), which are distributed before
amounts described in section 959(c)(3).
(e) Special rules regarding pre-2011
split taxes—(1) Taxes deemed paid prorata out of pre-2011 split taxes and
other taxes. If the pre-2011 taxes of a
section 902 corporation include both
pre-2011 split taxes and other taxes,
then foreign taxes deemed paid under
section 902 or 960 or otherwise removed
from post-1986 foreign income taxes in
pre-2011 taxable years will be treated as
attributable to pre-2011 split taxes and
other taxes on a pro-rata basis.
(2) Pre-2011 split taxes deemed paid
in pre-2011 taxable years. Pre-2011 split
taxes deemed paid in pre-2011 taxable
years in connection with a dividend
paid to a shareholder described in
section 902(b) retain their character as
pre-2011 split taxes. The section 902(b)
shareholder will be treated as the payor
section 902 corporation with respect to
those pre-2011 split taxes.
(3) Carryover of pre-2011 split taxes.
Pre-2011 split taxes that carry over to
another foreign corporation, including
under section 381, § 1.367(b)–7 or
similar rules, retain their character as
pre-2011 split taxes. The transferee
foreign corporation will be treated as the
payor section 902 corporation with
respect to those pre-2011 split taxes.
(4) Determining when pre-2011 split
taxes are no longer treated as pre-2011
split taxes. For each pre-2011 splitter
arrangement, as related income is taken
into account by the payor section 902
corporation or a section 902 shareholder
as provided in paragraph (d) of this
section, a ratable portion of the
associated pre-2011 split taxes will no
longer be treated as pre-2011 split taxes.
In the case of a pre-2011 splitter
arrangement involving a reverse hybrid
or a foreign consolidated group (as
described in paragraphs (b)(1) and (b)(2)
of this section, respectively), if aggregate
related income is reduced to zero (other
than as a result of a distribution,
deemed distribution, or inclusion
described in paragraph (d) of this
section) or less than zero, pre-2011 split
taxes will retain their character as pre2011 split taxes until the amount of
aggregate related income is positive and
the related income is taken into account
by the payor section 902 corporation or
VerDate Mar<15>2010
14:25 Feb 13, 2012
Jkt 226001
a section 902 shareholder as provided in
paragraph (d) of this section.
(f) Rules relating to partnerships and
trusts—(1) Taxes paid or accrued by
partnerships. In the case of foreign
income taxes paid or accrued by a
partnership, the taxes will be treated as
pre-2011 split taxes to the extent such
taxes are allocated to one or more
section 902 corporations and would be
pre-2011 split taxes if the partner
section 902 corporation had paid or
accrued the taxes directly on the date
such taxes are included by the section
902 corporation under sections 702 and
706(a). Further, any foreign income
taxes subject to section 909 will be
suspended in the hands of the partner
section 902 corporation.
(2) Section 704(b) allocations.
Partnership allocations that satisfy the
requirements of section 704(b) and the
regulations thereunder will not
constitute pre-2011 splitter
arrangements except to the extent the
arrangement is otherwise described in
paragraph (b) of this section (for
example, a payment or accrual on a
disregarded debt instrument that gives
rise to a shared loss).
(3) Trusts. Rules similar to the rules
of paragraph (f)(1) of this section will
apply in the case of any trust with one
or more beneficiaries that is a section
902 corporation.
(g) Interaction between section 909
and other Code provisions—(1) Section
904(c). Section 909 does not apply to
excess foreign income taxes that were
paid or accrued in pre-2011 taxable
years and carried forward and deemed
paid or accrued under section 904(c) in
a post-2010 taxable year.
(2) Section 905(a). For purposes of
determining in post-2010 taxable years
the allowable deduction for foreign
income taxes paid or accrued under
section 164(a), the carryover of excess
foreign income taxes under section
904(c), and the extended period for
claiming a credit or refund under
section 6511(d)(3)(A), foreign income
taxes to which section 909 applies are
first taken into account and treated as
paid or accrued in the year in which the
related income is taken into account,
and not in the earlier year to which the
tax relates (determined without regard
to section 909).
(3) Section 905(c). If a
redetermination of foreign taxes claimed
as a direct credit under section 901
occurs in a post-2010 taxable year and
the foreign tax redetermination relates
to a pre-2011 taxable year, to the extent
such foreign tax redetermination
increased the amount of foreign income
taxes paid or accrued with respect to the
pre-2011 taxable year (for example, due
PO 00000
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8143
to an additional assessment of foreign
tax or a payment of a previously accrued
tax not paid within two years), section
909 will not apply to such taxes. If a
redetermination of foreign tax paid or
accrued by a section 902 corporation
occurs in a post-2010 taxable year and
increases the amount of foreign income
taxes paid or accrued by the section 902
corporation with respect to a pre-2011
taxable year (for example, due to an
additional assessment of foreign tax or
a payment of a previously accrued tax
not paid within two years), such taxes
will be treated as pre-2011 taxes.
Section 909 will apply to such taxes if
they are pre-2011 split taxes and the
taxes will be suspended in the post2010 taxable year in which they would
otherwise be taken into account as a
prospective adjustment to the section
902 corporation’s pools of post-1986
foreign income taxes.
(4) Other foreign tax credit provisions.
Section 909 does not affect the
applicability of other restrictions or
limitations on the foreign tax credit
under existing law, including, for
example, the substantiation
requirements of section 905(b).
(h) Effective/applicability date. This
section applies to foreign income taxes
paid or accrued by section 902
corporations in pre-2011 taxable years
for purposes of computing foreign
income taxes deemed paid with respect
to distributions or inclusions out of
earnings and profits of section 902
corporations in taxable years of the
section 902 corporation beginning after
December 31, 2010.
(i) Expiration date. The applicability
of this section expires on February 9,
2015.
Steven T. Miller,
Deputy Commissioner for Services and
Enforcement.
Approved: February 8, 2012.
Emily S. McMahon,
Acting Assistant Secretary of the Treasury
(Tax Policy).
[FR Doc. 2012–3356 Filed 2–9–12; 4:15 pm]
BILLING CODE 4830–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9568]
RIN 1545–BI47
Section 482; Methods To Determine
Taxable Income in Connection With a
Cost Sharing Arrangement; Correction
AGENCY:
E:\FR\FM\14FER1.SGM
Internal Revenue Service (IRS).
14FER1
8144
ACTION:
Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / Rules and Regulations
Correcting amendment.
This document contains
corrections to final regulations (TD
9568), which were published in the
Federal Register on Thursday,
December 22, 2011 (76 FR 80082),
relating to section 482 and methods to
determine taxable income in connection
with a cost sharing arrangement.
DATES: This correction is effective on
February 14, 2012 and is applicable
beginning December 22, 2011.
FOR FURTHER INFORMATION CONTACT:
Joseph L. Tobin at (202) 435–5265 (not
a toll-free number).
SUPPLEMENTARY INFORMATION:
SUMMARY:
Background
The final regulations that is the
subject of these corrections are under
section 482 of the Internal Revenue
Code.
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 * * *
PART 1—[Corrected]
Par. 2. Section 1.482–7 is amended
by:
1. Revising the title of the table of
paragraph (g)(4)(viii), Example 2 (ii).
2. Revising the fourth sentence of
paragraph (g)(4)(viii), Example 3 (ii).
The revisions read as follows:
■
pmangrum on DSK3VPTVN1PROD with RULES
*
*
Guy R. Traynor,
Federal Register Liaison, Legal Processing
Division, Publication & Regulation Branch,
Associate Chief Counsel (Procedure and
Administration).
[FR Doc. 2012–3351 Filed 2–13–12; 8:45 am]
BILLING CODE 4830–01–P
26 CFR Part 1
[TD 9568]
RIN 1545–BI47
Section 482; Methods To Determine
Taxable Income in Connection With a
Cost Sharing Arrangement; Correction
(IRS).
correcting amendments.
This document contains
corrections to a correcting amendment
(TD 9568), which was published in the
Federal Register on Wednesday,
January 25, 2012 (77 FR 3606) relating
to section 482 and methods to
determine taxable income in connection
with a cost sharing arrangement.
DATES: This correction is effective on
February 14, 2012, and is applicable
beginnning December 22, 2011.
FOR FURTHER INFORMATION CONTACT:
Joseph L. Tobin at (202) 435–5265 (not
a toll-free number).
SUPPLEMENTARY INFORMATION:
SUMMARY:
Background
The final regulations that are the
subject of these corrections are under
section 482 of the Internal Revenue
Code.
§ 1.482–7 Methods to determine taxable
income in connection with a cost sharing
arrangement.
Need for Correction
As published, the correcting
amendments to final regulations (TD
9568), contains errors which may prove
to be misleading and are in need of
clarification.
*
*
*
*
(g) * * *
(4) * * *
(viii) Examples. * * *
Example 2. * * *
(ii) * * *
‘‘INCOME METHOD APPLICATION
NUMBER:’’
*
*
*
*
*
Example 3. * * *
(ii) * * * FS determines that the discount
rate that would be applied to determine the
Jkt 226001
*
AGENCY: Internal Revenue Service
ACTION: Correction to notice of
Correction of Publication
Accordingly, the final regulations (TD
9568) that was the subject of FR Doc.
2012–895 is corrected to read as follows:
16:20 Feb 13, 2012
*
Internal Revenue Service
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
VerDate Mar<15>2010
*
DEPARTMENT OF THE TREASURY
Need for Correction
As published, final regulations (TD
9568), contains errors which may prove
to be misleading and are in need of
clarification.
*
present value of income and costs
attributable to its participation in the
licensing alternative would be 12.5% as
compared to the 15% discount rate that
would be applicable in determining the
present value of the net income attributable
to its participation in the CSA (reflecting the
increased risk borne by FS in bearing a share
of the R & D costs in the cost sharing
alternative). * * *
Correction of Publication
Accordingly, the publication of the
correcting amendments to final
regulations, (TD 9568), which were the
subject of FR Doc. 2012–895, is
corrected as follows:
PO 00000
Frm 00056
Fmt 4700
Sfmt 4700
1. On page 3606, second column,
instructional paragraph 3., item 4. the
language ‘‘4. Revising paragraph
(k)(2)(ii)(3) is corrected to read ‘‘5.
Revising paragraph (k)(2)(ii)(A)(3).
2. On page 3606, second column,
under the instructional paragraph 3., the
language ‘‘4. Revising the fourth
sentence of paragraph (g)(4)(viii),
Example 3.’’ is added.
§ 1.482–7
[Corrected].
3. On page 3606, third column,
§ 1.482–7(g)(2)(v)(C), Example (i), add
three asterisks to the end of the
paragraph and remove the five asterisks
from below the paragraph.
4. On page 3606, third column,
§ 1.482–7(g)(2) after the five asterisks
following paragraph (ii) the language
‘‘(3) * * *’’, is corrected to read ‘‘(4)
* * *’’.
5. On page 3606, third column,
§ 1.482–7 (g)(4)(viii), the language ‘‘(viii)
* * *’’ is corrected to read ‘‘(viii)
Examples. * * *’’
6. On page 3606, third column,
§ 1.482–7(k)(2) below the five asterisks
following paragraph (viii), Example 3
add ‘‘(A)* * *’’ below ‘‘(ii)* * *’’ and
above ‘‘(3)’’ and underscore ‘‘(3)’’.
Guy R. Traynor,
Federal Register Liaison, Legal Processing
Division, Publication and Regulations
Branch, Associate Chief Counsel (Procedure
and Administration).
[FR Doc. 2012–3353 Filed 2–13–12; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF THE INTERIOR
Office of Surface Mining Reclamation
and Enforcement
30 CFR Part 943
[SATS Nos. TX–061–FOR; TX–062–FOR;
TX–063–FOR; Docket No. OSM–2011–0007]
Texas Regulatory Program
Office of Surface Mining
Reclamation and Enforcement, Interior.
ACTION: Final rule; approval of
amendment.
AGENCY:
We, the Office of Surface
Mining Reclamation and Enforcement
(OSM), are approving three amendments
to the Texas regulatory program under
the Surface Mining Control and
Reclamation Act of 1977 (SMCRA or the
Act). Texas at its own initiative
submitted three separate amendments to
its program: SATS Nos. TX–061–FOR,
TX–062–FOR, and TX–063–FOR. Texas
proposed revisions in TX–061–FOR by
SUMMARY:
E:\FR\FM\14FER1.SGM
14FER1
]]>Agencies
[Federal Register Volume 77, Number 30 (Tuesday, February 14, 2012)]
[Rules and Regulations]
[Pages 8143-8144]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-3351]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9568]
RIN 1545-BI47
Section 482; Methods To Determine Taxable Income in Connection
With a Cost Sharing Arrangement; Correction
AGENCY: Internal Revenue Service (IRS).
[[Page 8144]]
ACTION: Correcting amendment.
-----------------------------------------------------------------------
SUMMARY: This document contains corrections to final regulations (TD
9568), which were published in the Federal Register on Thursday,
December 22, 2011 (76 FR 80082), relating to section 482 and methods to
determine taxable income in connection with a cost sharing arrangement.
DATES: This correction is effective on February 14, 2012 and is
applicable beginning December 22, 2011.
FOR FURTHER INFORMATION CONTACT: Joseph L. Tobin at (202) 435-5265 (not
a toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that is the subject of these corrections are
under section 482 of the Internal Revenue Code.
Need for Correction
As published, final regulations (TD 9568), contains errors which
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, the final regulations (TD 9568) that was the subject
of FR Doc. 2012-895 is corrected to read as follows:
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 * * *
PART 1--[Corrected]
0
Par. 2. Section 1.482-7 is amended by:
1. Revising the title of the table of paragraph (g)(4)(viii),
Example 2 (ii).
2. Revising the fourth sentence of paragraph (g)(4)(viii), Example
3 (ii).
The revisions read as follows:
Sec. 1.482-7 Methods to determine taxable income in connection with a
cost sharing arrangement.
* * * * *
(g) * * *
(4) * * *
(viii) Examples. * * *
Example 2. * * *
(ii) * * *
``INCOME METHOD APPLICATION NUMBER:''
* * * * *
Example 3. * * *
(ii) * * * FS determines that the discount rate that would be
applied to determine the present value of income and costs
attributable to its participation in the licensing alternative would
be 12.5% as compared to the 15% discount rate that would be
applicable in determining the present value of the net income
attributable to its participation in the CSA (reflecting the
increased risk borne by FS in bearing a share of the R & D costs in
the cost sharing alternative). * * *
* * * * *
Guy R. Traynor,
Federal Register Liaison, Legal Processing Division, Publication &
Regulation Branch, Associate Chief Counsel (Procedure and
Administration).
[FR Doc. 2012-3351 Filed 2-13-12; 8:45 am]
BILLING CODE 4830-01-P
