Debt That Is a Position in Personal Property That Is Part of a Straddle, 54568-54569 [2013-21540]
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Federal Register / Vol. 78, No. 172 / Thursday, September 5, 2013 / Rules and Regulations
By direction of the Commission.
Donald S. Clark
Secretary.
the value of personal property or a
position in personal property. The text
of these temporary regulations also
serves as the text of the proposed
regulations (REG–111753–12) set forth
in the Proposed Rules section in this
issue of the Federal Register.
DATES: Effective Date: These regulations
are effective on September 5, 2013.
Applicability Dates: For date of
applicability, see § 1.1092(d)–1T(e).
FOR FURTHER INFORMATION CONTACT:
Mary Brewer, (202) 622–4695 (not a tollfree number).
SUPPLEMENTARY INFORMATION:
[FR Doc. 2013–21601 Filed 9–4–13; 8:45 am]
BILLING CODE 6750–01–C
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
21 CFR Part 1
General Enforcement Regulations
CFR Correction
In Title 21 of the Code of Federal
Regulations, Parts 1 to 199, revised as of
April 1, 2013, on page 7, in § 1.20, the
introductory text is corrected to read as
follows:
■
§ 1.20 Presence of mandatory label
information.
Except as otherwise provided by
section 900(13) of the Family Smoking
Prevention and Tobacco Control Act (21
U.S.C. 387(13)) defining ‘‘package,’’ the
term package means any container or
wrapping in which any food, drug,
device, or cosmetic is enclosed for use
in the delivery or display of such
commodities to retail purchasers, but
does not include:
*
*
*
*
*
BILLING CODE 1505–01–D
[FR Doc. 2013–21740 Filed 9–4–13; 8:45 am]
BILLING CODE 1505–01–D
DEPARTMENT OF TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9635]
RIN 1545–BK89
Debt That Is a Position in Personal
Property That Is Part of a Straddle
Internal Revenue Service (IRS),
Treasury.
ACTION: Final and temporary
regulations.
AGENCY:
This document contains final
and temporary regulations relating to
the application of the straddle rules to
a debt instrument. The temporary
regulations clarify that a taxpayer’s
obligation under a debt instrument can
be a position in personal property that
is part of a straddle. The temporary
regulations primarily affect taxpayers
that issue debt instruments that provide
for one or more payments that reference
ehiers on DSK2VPTVN1PROD with RULES
SUMMARY:
VerDate Mar<15>2010
14:09 Sep 04, 2013
Jkt 229001
Background and Explanation of
Provisions
1. Summary of Prior Notice of Proposed
Rule Making
This document contains amendments
to 26 CFR part 1. On January 18, 2001,
a notice of proposed rulemaking (REG–
105801–00; RIN 1545–AX92) (the 2001
NPRM) was published in the Federal
Register (66 FR 4746). The 2001 NPRM
addresses the definition of personal
property for purposes of section 263(g)
of the Internal Revenue Code (Code), the
types of expenses subject to
capitalization, and the operation of the
capitalization rules. Another portion of
the 2001 NPRM (proposed regulation
§ 1.1092(d)–1(d)) would clarify the
circumstances under which an issuer’s
position under a debt instrument is
treated as a position in personal
property that is part of a straddle.
No public hearing was requested or
held. Written and electronic comments
responding to the 2001 NPRM were
received, and the only commenter that
substantively addressed proposed
§ 1.1092(d)–1(d) urged its adoption.
This Treasury Decision adopts proposed
§ 1.1092(d)–1(d) (REG–105801–00) in
the form proposed. As so adopted, this
provision is designated as § 1.1092(d)–
1T(d). This Treasury Decision also
adopts the 2001 NPRM’s proposed
amendment to the effective/
applicability dates (proposed
§ 1.1092(d)–1(e)). As so adopted, this
effective/applicability date is designated
as § 1.1092(d)–1T(e)(2). The
amendments are discussed in section 2
of this preamble. The remainder of the
2001 NPRM remains proposed.
2. Overview of the Temporary
Regulations
The temporary regulations provide
guidance under section 1092 regarding
when an issuer’s obligation under a debt
instrument may be a position in actively
traded personal property and, therefore,
may be part of a straddle.
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Fmt 4700
Sfmt 4700
Definition of Personal Property for
Purposes of Section 1092
Section 1092(d)(1) defines ‘‘personal
property’’ to mean ‘‘personal property of
a type that is actively traded.’’ A debt
or obligation generally is not property of
the debtor or obligor. Nevertheless, if a
debt instrument provides for payments
that are (or are reasonably expected to
be) linked to the value of personal
property as so defined, then the obligor
on the instrument has a position in the
personal property referenced by the debt
instrument.
Section 1092(d)(7) provides that if a
debt instrument is denominated in a
nonfunctional currency, the obligor’s
position under the debt obligation is a
position in the nonfunctional currency.
Some maintain that section 1092(d)(7)
evidences an intent by Congress to limit
the circumstances in which an obligor’s
interest in a debt instrument may be a
position in a straddle, and that such
treatment is proper only with respect to
debt obligations denominated in
nonfunctional currency. The IRS and
the Treasury Department do not believe
that section 1092(d)(7) describes the
only circumstance in which an obligor’s
interest in a debt instrument may be
treated as part of a straddle. The statute
and the legislative history do not
contain any indication that Congress
intended to limit section 1092 in this
manner; rather, the legislative history
characterizes section 1092(d)(7) as a
clarification of prior law:
The Senate amendment clarifies that an
obligor’s interest in a foreign currency
denominated obligation is a ‘‘position’’ for
purposes of the loss deferral rule. The
rationale for this treatment is that a foreign
currency borrowing is economically similar
to a short position in the foreign currency.
H.R. Rep. No. 99–841, pt. 2, at 670
(1986) (Conf. Rep.); 1986–3 (Vol. 4) CB
670. Moreover, it is clear that an
economic exposure associated with an
obligation that is not a debt instrument
(such as a written option or the
obligation created by a short sale) may
be a straddle position. Similarly, a debt
instrument may be a position in
personal property, and accordingly
subject to the straddle rules, if the
obligation is linked to personal
property. Therefore, § 1.1092(d)–1T(d)
of the temporary regulations expressly
provides that an obligation under a debt
instrument may be a position in
personal property that is part of a
straddle.
Dates of Applicability of the Regulations
The temporary regulations adopt the
effective/applicability date set forth in
the 2001 NPRM by providing that
E:\FR\FM\05SER1.SGM
05SER1
Federal Register / Vol. 78, No. 172 / Thursday, September 5, 2013 / Rules and Regulations
§ 1.1092(d)–1T(d) applies to straddles
established on or after January 17, 2001
(the date on which the 2001 NPRM was
filed with the Federal Register). No
inference is intended with respect to
straddles established prior to January
17, 2001. In appropriate cases, the IRS
may take the position under section
1092(d)(2) that, even in the absence of
a regulation, an obligation under a debt
instrument was part of a straddle prior
to the effective date of § 1.1092(d)–1T(d)
if the debt instrument functioned
economically as an interest in actively
traded personal property.
Special Analyses
It has been determined that this
Treasury decision is not a significant
regulatory action as defined in
Executive Order 12866, as
supplemented by Executive Order
13563. Therefore, a regulatory
assessment is not required. It also has
been determined that section 553(b) of
the Administrative Procedure Act (5
U.S.C. chapter 5) does not apply to these
regulations. For the applicability of the
Regulatory Flexibility Act (5 U.S.C.
chapter 6) refer to the Special Analyses
section of the preamble to the crossreference notice of proposed rulemaking
published in the Proposed Rules section
in this issue of the Federal Register.
Pursuant to section 7805(f) of the Code,
this regulation has been submitted to
the Chief Counsel for Advocacy of the
Small Business Administration for
comment on its impact on small
business.
Drafting Information
The principal author of these
regulations is Mary Brewer, Office of
Associate Chief Counsel (Financial
Institutions and Products). However,
other personnel from the IRS and the
Treasury Department participated in
their development.
*
*
*
*
(d) [Reserved]. For further guidance,
see § 1.1092(d)–1T(d).
(e) Effective/applicability dates. (1)
Paragraph (b)(1)(vii) of this section
applies to positions entered into on or
after October 14, 1993. Paragraph (c) of
this section applies to positions entered
into on or after July 8, 1991.
(2) [Reserved]. For further guidance,
see § 1.1092(d)–1T(e)(2).
■ Par. 3. Section 1.1092(d)–1T is added
to read as follows:
§ 1.1092(d)–1T Definitions and special
rules (temporary).
(a) through (c) [Reserved]. For further
guidance, see § 1.1092(d)–1(a) through
(c).
(d) Debt instrument linked to the
value of personal property. If a taxpayer
is the obligor under a debt instrument
one or more payments on which are
linked to the value of personal property
or a position with respect to personal
property, then the taxpayer’s obligation
under the debt instrument is a position
with respect to personal property and
may be part of a straddle.
(e) Effective/applicability dates—(1)
[Reserved]. For further guidance, see
§ 1.1092(d)–1(e)(1).
(2) Notwithstanding paragraph (e)(1)
of this section, paragraph (d) of this
section applies to straddles established
on or after January 17, 2001.
(f) Expiration date. The applicability
of this section expires on September 2,
2016.
BILLING CODE 4830–01–P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 is amended by adding an entry
in numerical order to read as follows:
■
ehiers on DSK2VPTVN1PROD with RULES
Definitions and special rules.
*
[FR Doc. 2013–21540 Filed 9–4–13; 8:45 am]
Amendments to the Regulations
Accordingly, 26 CFR part 1 is
amended as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.1092(d)–1T also issued under 26
U.S.C. 1092(b)(1). * * *
Par. 2. Section 1.1092(d)–1 is
amended by redesignating paragraph (d)
as newly-designated paragraph (e) and
■
14:09 Sep 04, 2013
§ 1.1092(d)–1
Approved: August 26, 2013.
Beth Tucker,
Deputy Commissioner for Operations
Support.
Mark J. Mazur,
Assistant Secretary (Tax Policy).
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
VerDate Mar<15>2010
revising newly-designated paragraph (e),
and adding new paragraph (d) to read as
follows:
Jkt 229001
33 CFR Part 100
[USCG–2013–0721]
RIN 1625–AA08
Special Local Regulation, Cumberland
River, Mile 190.0 to 192.0; Nashville, TN
Coast Guard, DHS.
Temporary final rule.
AGENCY:
ACTION:
PO 00000
Frm 00009
Fmt 4700
Sfmt 4700
54569
The Coast Guard is
establishing a temporary special local
regulation for the waters of the
Cumberland River beginning at mile
marker 190.0 and ending at mile marker
192.0, extending bank to bank. This
zone is necessary to protect participants
in the Cumberland River Dragon Boat
Festival. Entry into this area is
prohibited unless specifically
authorized by the Captain of the Port
(COTP) Ohio Valley or designated
representative.
DATES: This rule is effective and
enforceable through actual notice from
8:00 a.m. to 6:00 p.m. September 7,
2013.
ADDRESSES: Documents mentioned in
this preamble are part of docket [USCG–
2013–0721]. To view documents
mentioned in this preamble as being
available in the docket, go to https://
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 temporary
rule, call Petty Officer James Alter,
Marine Safety Detachment Nashville, at
(615) 736–5421 or email at
james.r.alter@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:
Table of Acronyms
BNM Broadcast Notices to Mariners
COTP Captain of the Port
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)(3)(B), the Coast Guard finds that
good cause exists for not publishing a
E:\FR\FM\05SER1.SGM
05SER1
]]>Agencies
[Federal Register Volume 78, Number 172 (Thursday, September 5, 2013)]
[Rules and Regulations]
[Pages 54568-54569]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-21540]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9635]
RIN 1545-BK89
Debt That Is a Position in Personal Property That Is Part of a
Straddle
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final and temporary regulations.
-----------------------------------------------------------------------
SUMMARY: This document contains final and temporary regulations
relating to the application of the straddle rules to a debt instrument.
The temporary regulations clarify that a taxpayer's obligation under a
debt instrument can be a position in personal property that is part of
a straddle. The temporary regulations primarily affect taxpayers that
issue debt instruments that provide for one or more payments that
reference the value of personal property or a position in personal
property. The text of these temporary regulations also serves as the
text of the proposed regulations (REG-111753-12) set forth in the
Proposed Rules section in this issue of the Federal Register.
DATES: Effective Date: These regulations are effective on September 5,
2013.
Applicability Dates: For date of applicability, see Sec.
1.1092(d)-1T(e).
FOR FURTHER INFORMATION CONTACT: Mary Brewer, (202) 622-4695 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Background and Explanation of Provisions
1. Summary of Prior Notice of Proposed Rule Making
This document contains amendments to 26 CFR part 1. On January 18,
2001, a notice of proposed rulemaking (REG-105801-00; RIN 1545-AX92)
(the 2001 NPRM) was published in the Federal Register (66 FR 4746). The
2001 NPRM addresses the definition of personal property for purposes of
section 263(g) of the Internal Revenue Code (Code), the types of
expenses subject to capitalization, and the operation of the
capitalization rules. Another portion of the 2001 NPRM (proposed
regulation Sec. 1.1092(d)-1(d)) would clarify the circumstances under
which an issuer's position under a debt instrument is treated as a
position in personal property that is part of a straddle.
No public hearing was requested or held. Written and electronic
comments responding to the 2001 NPRM were received, and the only
commenter that substantively addressed proposed Sec. 1.1092(d)-1(d)
urged its adoption. This Treasury Decision adopts proposed Sec.
1.1092(d)-1(d) (REG-105801-00) in the form proposed. As so adopted,
this provision is designated as Sec. 1.1092(d)-1T(d). This Treasury
Decision also adopts the 2001 NPRM's proposed amendment to the
effective/applicability dates (proposed Sec. 1.1092(d)-1(e)). As so
adopted, this effective/applicability date is designated as Sec.
1.1092(d)-1T(e)(2). The amendments are discussed in section 2 of this
preamble. The remainder of the 2001 NPRM remains proposed.
2. Overview of the Temporary Regulations
The temporary regulations provide guidance under section 1092
regarding when an issuer's obligation under a debt instrument may be a
position in actively traded personal property and, therefore, may be
part of a straddle.
Definition of Personal Property for Purposes of Section 1092
Section 1092(d)(1) defines ``personal property'' to mean ``personal
property of a type that is actively traded.'' A debt or obligation
generally is not property of the debtor or obligor. Nevertheless, if a
debt instrument provides for payments that are (or are reasonably
expected to be) linked to the value of personal property as so defined,
then the obligor on the instrument has a position in the personal
property referenced by the debt instrument.
Section 1092(d)(7) provides that if a debt instrument is
denominated in a nonfunctional currency, the obligor's position under
the debt obligation is a position in the nonfunctional currency. Some
maintain that section 1092(d)(7) evidences an intent by Congress to
limit the circumstances in which an obligor's interest in a debt
instrument may be a position in a straddle, and that such treatment is
proper only with respect to debt obligations denominated in
nonfunctional currency. The IRS and the Treasury Department do not
believe that section 1092(d)(7) describes the only circumstance in
which an obligor's interest in a debt instrument may be treated as part
of a straddle. The statute and the legislative history do not contain
any indication that Congress intended to limit section 1092 in this
manner; rather, the legislative history characterizes section
1092(d)(7) as a clarification of prior law:
The Senate amendment clarifies that an obligor's interest in a
foreign currency denominated obligation is a ``position'' for
purposes of the loss deferral rule. The rationale for this treatment
is that a foreign currency borrowing is economically similar to a
short position in the foreign currency.
H.R. Rep. No. 99-841, pt. 2, at 670 (1986) (Conf. Rep.); 1986-3 (Vol.
4) CB 670. Moreover, it is clear that an economic exposure associated
with an obligation that is not a debt instrument (such as a written
option or the obligation created by a short sale) may be a straddle
position. Similarly, a debt instrument may be a position in personal
property, and accordingly subject to the straddle rules, if the
obligation is linked to personal property. Therefore, Sec. 1.1092(d)-
1T(d) of the temporary regulations expressly provides that an
obligation under a debt instrument may be a position in personal
property that is part of a straddle.
Dates of Applicability of the Regulations
The temporary regulations adopt the effective/applicability date
set forth in the 2001 NPRM by providing that
[[Page 54569]]
Sec. 1.1092(d)-1T(d) applies to straddles established on or after
January 17, 2001 (the date on which the 2001 NPRM was filed with the
Federal Register). No inference is intended with respect to straddles
established prior to January 17, 2001. In appropriate cases, the IRS
may take the position under section 1092(d)(2) that, even in the
absence of a regulation, an obligation under a debt instrument was part
of a straddle prior to the effective date of Sec. 1.1092(d)-1T(d) if
the debt instrument functioned economically as an interest in actively
traded personal property.
Special Analyses
It has been determined that this Treasury decision is not a
significant regulatory action as defined in Executive Order 12866, as
supplemented by Executive Order 13563. Therefore, a regulatory
assessment is not required. It also has been determined that section
553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does
not apply to these regulations. For the applicability of the Regulatory
Flexibility Act (5 U.S.C. chapter 6) refer to the Special Analyses
section of the preamble to the cross-reference notice of proposed
rulemaking published in the Proposed Rules section in this issue of the
Federal Register. Pursuant to section 7805(f) of the Code, this
regulation has been submitted to the Chief Counsel for Advocacy of the
Small Business Administration for comment on its impact on small
business.
Drafting Information
The principal author of these regulations is Mary Brewer, Office of
Associate Chief Counsel (Financial Institutions and Products). However,
other personnel from the IRS and the Treasury Department participated
in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Amendments to the Regulations
Accordingly, 26 CFR part 1 is amended as follows:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 is amended by adding an
entry in numerical order to read as follows:
Authority: 26 U.S.C. 7805 * * *
Section 1.1092(d)-1T also issued under 26 U.S.C. 1092(b)(1). * *
*
0
Par. 2. Section 1.1092(d)-1 is amended by redesignating paragraph (d)
as newly-designated paragraph (e) and revising newly-designated
paragraph (e), and adding new paragraph (d) to read as follows:
Sec. 1.1092(d)-1 Definitions and special rules.
* * * * *
(d) [Reserved]. For further guidance, see Sec. 1.1092(d)-1T(d).
(e) Effective/applicability dates. (1) Paragraph (b)(1)(vii) of
this section applies to positions entered into on or after October 14,
1993. Paragraph (c) of this section applies to positions entered into
on or after July 8, 1991.
(2) [Reserved]. For further guidance, see Sec. 1.1092(d)-1T(e)(2).
0
Par. 3. Section 1.1092(d)-1T is added to read as follows:
Sec. 1.1092(d)-1T Definitions and special rules (temporary).
(a) through (c) [Reserved]. For further guidance, see Sec.
1.1092(d)-1(a) through (c).
(d) Debt instrument linked to the value of personal property. If a
taxpayer is the obligor under a debt instrument one or more payments on
which are linked to the value of personal property or a position with
respect to personal property, then the taxpayer's obligation under the
debt instrument is a position with respect to personal property and may
be part of a straddle.
(e) Effective/applicability dates--(1) [Reserved]. For further
guidance, see Sec. 1.1092(d)-1(e)(1).
(2) Notwithstanding paragraph (e)(1) of this section, paragraph (d)
of this section applies to straddles established on or after January
17, 2001.
(f) Expiration date. The applicability of this section expires on
September 2, 2016.
Approved: August 26, 2013.
Beth Tucker,
Deputy Commissioner for Operations Support.
Mark J. Mazur,
Assistant Secretary (Tax Policy).
[FR Doc. 2013-21540 Filed 9-4-13; 8:45 am]
BILLING CODE 4830-01-P
