Noncompensatory Partnership Options; Correction, 17868-17869 [2013-06703]

Download as PDF 17868 Federal Register / Vol. 78, No. 57 / Monday, March 25, 2013 / Rules and Regulations (c) Conditions of use in cattle—(1) Indications for use and amounts. (i) For the treatment of ovarian follicular cysts in dairy cattle. Administer 100 mg gonadorelin by intramuscular or intravenous injection. (ii) For use with cloprostenol sodium to synchronize estrous cycles to allow for fixed-time artificial insemination in lactating dairy cows and beef cows. Administer to each cow 100 mg gonadorelin by intramuscular injection, followed 6 to 8 days later by 500 mg cloprostenol by intramuscular injection, followed 30 to 72 hours later by 100 mg gonadorelin by intramuscular injection. (2) Limitations. Federal law restricts this drug to use by or on the order of a licensed veterinarian. ■ 5. In § 522.1077, revise the section heading to read as set forth below; and in paragraph (c)(3), remove the first sentence. § 522.1077 Gonadorelin hydrochloride. * * * § 522.1078 * * Authority: 21 U.S.C. 360b. 12. In paragraph (b) of § 529.1186, remove ‘‘000074’’ and in its place add ‘‘000044’’. also modify the regulations under section 704(b) regarding the maintenance of the partners’ capital accounts and the determination of the partners’ distributive shares of partnership items. The final regulations also contain a characterization rule providing that the holder of a noncompensatory option is treated as a partner under certain circumstances. DATES: This correction is effective on March 25, 2013 and is applicable on or after February 5, 2013. FOR FURTHER INFORMATION CONTACT: Benjamin Weaver, at (202) 622–3050 (not a toll-free number). SUPPLEMENTARY INFORMATION: § 529.2150 Background § 524.2482 [Amended] 10. In paragraph (b) of § 524.2482, remove ‘‘067292’’ and in its place add ‘‘051311’’. ■ PART 529—CERTAIN OTHER DOSAGE FORM NEW ANIMAL DRUGS 11. The authority citation for 21 CFR part 529 continues to read as follows: ■ Authority: 21 U.S.C. 360b. § 529.1186 [Amended] ■ [Amended] 13. In paragraph (b) of § 529.2150, remove ‘‘000074’’ and in its place add ‘‘000044’’. ■ The final regulations that are the subject of this document are under sections 171, 704, 721, 761, 1272, 1273, and 1275 of the Internal Revenue Code. Dated: March 20, 2013. Bernadette Dunham, Director, Center for Veterinary Medicine. Need for Correction BILLING CODE 4160–01–P List of Subjects in 26 CFR Part 1 Internal Revenue Service 6. Redesignate § 522.1078 as § 522.1075. ■ 7. In § 522.1870, revise the section heading and paragraphs (b), (c)(1)(iii), and (c)(2)(iii) to read as follows: As published, the final regulations (TD 9612) contain errors that may prove to be misleading and are in need of clarification. DEPARTMENT OF THE TREASURY [Redesignated as § 522.1075] Income taxes, Reporting and recordkeeping requirements. 26 CFR Part 1 Correction of Publication [TD 9612] RIN 1545–BA53 Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments: Noncompensatory Partnership Options; Correction PART 1—INCOME TAXES [FR Doc. 2013–06748 Filed 3–22–13; 8:45 am] ■ § 522.1870 Praziquantel. * * * * * (b) Sponsors. See Nos. 000859 and 061623 in § 510.600(c) of this chapter. (c) * * * (1) * * * (iii) Limitations. Federal law restricts this drug to use by or on the order of a licensed veterinarian. (2) * * * (iii) Limitations. Federal law restricts this drug to use by or on the order of a licensed veterinarian. § 522.2005 [Amended] 8. In paragraph (b)(2) of § 522.2005, remove ‘‘000074’’ and in its place add ‘‘000044’’. ■ PART 524—OPHTHALMIC AND TOPICAL DOSAGE FORM NEW ANIMAL DRUGS 9. The authority citation for 21 CFR part 524 continues to read as follows: ■ Internal Revenue Service (IRS), Treasury. ACTION: Correcting amendment. AGENCY: This document contains corrections to final regulations (TD 9612) that were published in the Federal Register on Tuesday, February 5, 2013 (78 FR 7997) relating to the tax treatment of noncompensatory options and convertible instruments issued by a partnership. The final regulations generally provide that the exercise of a noncompensatory option does not cause the recognition of immediate income or loss by either the issuing partnership or the option holder. The final regulations Authority: 26 U.S.C. 7805 * * * SUMMARY: K srobinson on DSK4SPTVN1PROD with NOTICES Paragraph 1. The authority citation for part 1 continues to read in part as follows: ■ Tax Par. 2. Section 1.704–1 is amended by revising the table in paragraph (b)(5) Example 35 (ii), and the first sentence of paragraph (b)(5) Example 35 (iii) to read as follows: ■ § 1.704–1 * Partner’s distributive share. * * * * (b) * * * (5) * * * Example 35. * * * (ii) * * * L Book Tax M Book Tax Book Initial capital account ............................... Year 1 net income ................................... Year 2 net income ................................... Year 3 net income ................................... $10,000 1,000 1,000 1,000 $10,000 1,000 1,000 1,000 $10,000 1,000 1,000 1,000 $10,000 1,000 1,000 1,000 0 0 0 0 0 0 0 0 Year 4 initial capital account .................... 13,000 13,000 13,000 13,000 0 0 VerDate Mar<15>2010 16:01 Mar 22, 2013 Jkt 229001 PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 E:\FR\FM\25MRR1.SGM 25MRR1 Federal Register / Vol. 78, No. 57 / Monday, March 25, 2013 / Rules and Regulations (iii) At the beginning of Year 4, at a time when property D, LLC’s only asset, has a value of $33,000 and basis of $24,000 ($30,000 original basis less $6,000 depreciation in Years 1 through 3), and LLC has accumulated undistributed cash of $12,000 ($15,000 gross income less $3,000 of interest payments) in LLC, M converts the debt into a 1⁄3 interest in LLC. * * * * * * * * DEPARTMENT OF HOMELAND SECURITY Par. 3. Section 1.761–3 is amended by: ■ a. Revising the second sentence of paragraph (b)(3); ■ b. Revising paragraph (f) introductory text; ■ c. Removing ‘‘1’’ from paragraph (f) Example heading; and ■ d. Revising the second sentence in the paragraph (f) Example. The revisions read as follows: AGENCY: ■ § 1.761–3 partners. Certain option holders treated as * * * * * (b) * * * (3) * * * In addition, an option includes convertible debt (as defined in § 1.721–2(g)(2)) and convertible equity (as defined in § 1.721–2(g)(3)). * * * * * * * * (f) Example. The following example illustrates the provisions of this section. For purposes of the example, assume that PRS is a partnership for Federal tax purposes, none of the noncompensatory option holders or partners are related persons, and that general principles of law do not apply to treat the noncompensatory option as a partnership interest. The example reads as follows: Example. * * * In exchange for a premium of $10x, PRS issues a noncompensatory option to A to acquire a 10 percent interest in PRS for $110x at any time during a 3-year period commencing on the date on which the option is issued. * * * * * * * * srobinson on DSK4SPTVN1PROD with NOTICES LaNita VanDyke, Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel, (Procedure and Administration). [FR Doc. 2013–06703 Filed 3–22–13; 8:45 am] BILLING CODE 4830–01–P VerDate Mar<15>2010 16:01 Mar 22, 2013 Jkt 229001 Coast Guard 33 CFR Part 165 [Docket No. USCG–2013–0005] RIN 1625–AA00 Safety Zone; Desert Storm Shootout; Lake Havasu, Lake Havasu City, AZ ACTION: Coast Guard, DHS. Temporary final rule. The Coast Guard is establishing a temporary safety zone on the navigable waters of the Colorado River in Lake Havasu, Lake Havasu City, Arizona in support of the Desert Storm Shootout. This temporary safety zone is necessary to provide for the safety of the participants, crew, spectators, participating vessels, and other vessels and users of the waterway. Persons and vessels are prohibited from entering into, transiting through, or anchoring within this safety zone unless authorized by the Captain of the Port, or his designated representative. DATES: This rule is effective from 8 a.m. on April 26 through 6 p.m. April 28, 2013. It will be enforced from 8 a.m. through 6 p.m. on April 26 and 27, 2013. If the event is delayed by inclement weather, it will also be enforced from 8 a.m. to 6 p.m. on April 28, 2013. ADDRESSES: Documents mentioned in this preamble are part of docket [USCG– 2013–0005]. To view documents mentioned in this preamble as being available in the docket, go to http:// www.regulations.gov, type the docket number in the ‘‘SEARCH’’ box and click ‘‘SEARCH.’’ Click on Open Docket Folder on the line associated with this rulemaking. You may also visit the Docket Management Facility in Room W12–140 on the ground floor of the Department of Transportation West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: If you have questions on this rule, call or email Petty Officer Deborah Metzger, Waterways Management, U.S. Coast Guard Sector San Diego, Coast Guard; telephone 619–278–7656, email d11marineeventssandiego@uscg.mil. If you have questions on viewing or submitting material to the docket, call Barbara Hairston, Program Manager, Docket Operations, telephone (202) 366–9826. SUPPLEMENTARY INFORMATION: SUMMARY: PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 17869 Table of Acronyms DHS Department of Homeland Security FR Federal Register NPRM Notice of Proposed Rulemaking A. Regulatory History and Information The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are ‘‘impracticable, unnecessary, or contrary to the public interest.’’ Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because notice procedures were impracticable. The Coast Guard did not receive notice of the pertinent details of this event in time to publish an NPRM and solicit public comment. This is a very large event with many spectators and participants expecting it to occur as scheduled. Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register. The Coast Guard did not receive notice of the pertinent details of this event in time to allow for the delay between publication and the effective date of the rule. Delaying the effective date would be contrary to the public interest. Many spectators and participants expect this event to occur as scheduled. Immediate action is necessary to ensure the safety of the crew, spectators, and other vessels and users of the waterway. B. Basis and Purpose The legal basis for this temporary rule is the Ports and Waterways Safety Act which authorizes the Coast Guard to establish safety zones (33 U.S.C 1221 et seq.). Lake Racer LLC is sponsoring the Desert Storm Shootout, which is to be held on the Colorado River in Lake Havasu City, Arizona. This temporary safety zone is necessary to provide for the safety of the participants, crew, spectators, sponsor vessels, and other users of the waterway. This event involves powerboats participating in an exhibition run on a closed course. The size of the boats varies from 19 to 55 feet. Approximately 250 boats will participate in this event. The sponsor will provide approximately 25 rescue, and safety patrol boats for the safety of this event. E:\FR\FM\25MRR1.SGM 25MRR1

Agencies

[Federal Register Volume 78, Number 57 (Monday, March 25, 2013)]
[Rules and Regulations]
[Pages 17868-17869]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-06703]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9612]
RIN 1545-BA53


Noncompensatory Partnership Options; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

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SUMMARY: This document contains corrections to final regulations (TD 
9612) that were published in the Federal Register on Tuesday, February 
5, 2013 (78 FR 7997) relating to the tax treatment of noncompensatory 
options and convertible instruments issued by a partnership. The final 
regulations generally provide that the exercise of a noncompensatory 
option does not cause the recognition of immediate income or loss by 
either the issuing partnership or the option holder. The final 
regulations also modify the regulations under section 704(b) regarding 
the maintenance of the partners' capital accounts and the determination 
of the partners' distributive shares of partnership items. The final 
regulations also contain a characterization rule providing that the 
holder of a noncompensatory option is treated as a partner under 
certain circumstances.

DATES: This correction is effective on March 25, 2013 and is applicable 
on or after February 5, 2013.

FOR FURTHER INFORMATION CONTACT: Benjamin Weaver, at (202) 622-3050 
(not a toll-free number).

SUPPLEMENTARY INFORMATION: 

Background

    The final regulations that are the subject of this document are 
under sections 171, 704, 721, 761, 1272, 1273, and 1275 of the Internal 
Revenue Code.

Need for Correction

    As published, the final regulations (TD 9612) 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 
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 by revising the table in paragraph 
(b)(5) Example 35 (ii), and the first sentence of paragraph (b)(5) 
Example 35 (iii) to read as follows:


Sec.  1.704-1  Partner's distributive share.

* * * * *
    (b) * * *
    (5) * * *
    Example 35. * * *
    (ii) * * *

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         K                               L                               M
                                                         -----------------------------------------------------------------------------------------------
                                                                Tax            Book             Tax            Book             Tax            Book
--------------------------------------------------------------------------------------------------------------------------------------------------------
Initial capital account.................................         $10,000         $10,000         $10,000         $10,000               0               0
Year 1 net income.......................................           1,000           1,000           1,000           1,000               0               0
Year 2 net income.......................................           1,000           1,000           1,000           1,000               0               0
Year 3 net income.......................................           1,000           1,000           1,000           1,000               0               0
                                                         -----------------------------------------------------------------------------------------------
Year 4 initial capital account..........................          13,000          13,000          13,000          13,000               0               0
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 17869]]

    (iii) At the beginning of Year 4, at a time when property D, LLC's 
only asset, has a value of $33,000 and basis of $24,000 ($30,000 
original basis less $6,000 depreciation in Years 1 through 3), and LLC 
has accumulated undistributed cash of $12,000 ($15,000 gross income 
less $3,000 of interest payments) in LLC, M converts the debt into a 
\1/3\ interest in LLC. * * *
* * * * *

0
Par. 3. Section 1.761-3 is amended by:
0
a. Revising the second sentence of paragraph (b)(3);
0
b. Revising paragraph (f) introductory text;
0
c. Removing ``1'' from paragraph (f) Example heading; and
0
d. Revising the second sentence in the paragraph (f) Example.
    The revisions read as follows:


Sec.  1.761-3  Certain option holders treated as partners.

* * * * *
    (b) * * *
    (3) * * * In addition, an option includes convertible debt (as 
defined in Sec.  1.721-2(g)(2)) and convertible equity (as defined in 
Sec.  1.721-2(g)(3)). * * *
* * * * *
    (f) Example. The following example illustrates the provisions of 
this section. For purposes of the example, assume that PRS is a 
partnership for Federal tax purposes, none of the noncompensatory 
option holders or partners are related persons, and that general 
principles of law do not apply to treat the noncompensatory option as a 
partnership interest. The example reads as follows:

    Example. * * * In exchange for a premium of $10x, PRS issues a 
noncompensatory option to A to acquire a 10 percent interest in PRS 
for $110x at any time during a 3-year period commencing on the date 
on which the option is issued. * * *
* * * * *

LaNita VanDyke,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel, (Procedure and Administration).
[FR Doc. 2013-06703 Filed 3-22-13; 8:45 am]
BILLING CODE 4830-01-P