Tax Treatment of Cafeteria Plans, 17083 [2016-07018]
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Federal Register / Vol. 81, No. 59 / Monday, March 28, 2016 / Rules and Regulations
immediately after the transaction.
Accordingly, Asset 2 is also loss duplication
property. But for section 362(e)(2) and this
section, DC’s basis in Asset 3 would be $32,
which would not exceed Asset 3’s $40 value
immediately after the transaction.
Accordingly, Asset 3 is not loss duplication
property.
(iii) Basis in loss duplication property. DC’s
basis in Asset 1 is $56, computed as its $80
basis under section 362(a) reduced by $24, its
allocable portion of FC1’s $32 net built-in
loss ($30/40 × $32). DC’s basis in Asset 2 is
$112, computed as its $120 basis under
section 362(a) reduced by $8, its allocable
portion of FC1’s $40 net built-in loss ($10/
$40 × $32).
(iv) Basis in other property. Under section
358(a), FC1 has an exchanged basis of $232
in the DC stock it receives in the transaction.
(2) Application of section to FC2. FC2’s
transfer of Asset 3 is not a loss duplication
transaction because Asset 3’s value exceeds
its basis immediately after the transaction.
Accordingly, under section 362(a), DC’s basis
in Asset 3 is $100.
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(j) Effective/applicability date. * * *
The introductory text and Example 11
of paragraph (h) of this section apply
with respect to transactions occurring
on or after March 28, 2016, and also
with respect to transactions occurring
before such date as a result of an entity
classification election under
§ 301.7701–3 of this chapter filed on or
after March 28, 2016, unless such
transaction is pursuant to a binding
agreement that was in effect prior to
March 28, 2016 and at all times
thereafter. In addition, taxpayers may
apply such provisions to any transaction
occurring after October 22, 2004.
■ Par. 12. Section 1.368–3 is amended
by revising paragraphs (a)(3) and (b)(3)
and adding a sentence to the end of
paragraph (e) to read as follows:
Lhorne on DSK5TPTVN1PROD with RULES
§ 1.368–3 Records to be kept and
information to be filed with returns.
(a) * * *
(3) The value and basis of the assets,
stock or securities of the target
corporation transferred in the
transaction, determined immediately
before the transfer and aggregated as
follows—
(i) Importation property transferred in
a loss importation transaction, as
defined in § 1.362–3(c)(2) and (3),
respectively;
(ii) Loss duplication property as
defined in § 1.362–4(g)(1);
(iii) Property with respect to which
any gain or loss was recognized on the
transfer (without regard to whether such
property is also identified in paragraph
(a)(3)(i) or (ii) of this section);
(iv) Property not described in
paragraph (a)(3)(i), (ii), or (iii) of this
section; and
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(b) * * *
(3) The value and basis of all the stock
or securities of the target corporation
held by the significant holder that is
transferred in the transaction and such
holder’s basis in that stock or securities,
determined immediately before the
transfer and aggregated as follows—
(i) Stock and securities with respect to
which an election is made under section
362(e)(2)(C); and
(ii) Stock and securities not described
in paragraph (b)(3)(i) of this section.
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(e) Effective/applicability date. * * *
Paragraphs (a)(3) and (b)(3) of this
section apply with respect to
reorganizations occurring on or after
March 28, 2016, and also with respect
to reorganizations occurring before such
date as a result of an entity classification
election under § 301.7701–3 of this
chapter filed on or after March 28, 2016,
unless such reorganization is pursuant
to a binding agreement that was in effect
prior to March 28, 2016 and at all times
thereafter.
■ Par. 13. Section 1.705–1 is amended
by revising paragraph (a)(9) to read as
follows:
§ 1.705–1 Determination of basis of
partner’s interest.
(a) * * *
(9) For basis adjustments necessary to
coordinate sections 705 and 362(e)(2),
see § 1.362–4(e)(1).
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■ Par. 14. Section 1.755–1 is amended
by adding a sentence after the second
sentence of paragraph (b)(1)(i) to read as
follows:
§ 1.755–1
Rules for allocation of basis.
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(b) * * *
(1) * * *
(i) Application. * * * For transfers
subject to section 334(b)(1)(B), see
§ 1.334–1(b)(3)(iii)(C)(1) (treating a
determination of basis under § 1.334–
1(b)(3) as a determination not by
reference to the transferor’s basis solely
for purposes of applying section 755);
for transfers subject to section 362(e)(1),
see § 1.362–3(b)(4)(i) (treating a
determination of basis under § 1.362–3
as a determination not by reference to
the transferor’s basis solely for purposes
of applying section 755); for transfers
subject to section 362(e)(2), see § 1.362–
4(c)(3)(i) (treating a determination of
basis under § 1.362–4 as a determination
by reference to the transferor’s basis for
all purposes). * * *
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■ Par. 15. Section 1.1367–1 is amended
by revising the last sentence of
paragraph (c)(2) to read as follows:
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17083
§ 1.1367–1 Adjustments to basis of
shareholder’s stock in an S corporation.
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(c) * * *
(2) Noncapital, nondeductible
expenses. * * * For basis adjustments
necessary to coordinate sections 1367
and 362(e)(2), see § 1.362–4(e)(2).
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John M Dalrymple,
Deputy Commissioner for Services and
Enforcement.
Approved: February 16, 2016.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax
Policy).
[FR Doc. 2016–06227 Filed 3–25–16; 8:45 am]
BILLING CODE 4830–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
Tax Treatment of Cafeteria Plans
CFR Correction
In Title 26 of the Code of Federal
Regulations, Part 1 (§§ 1.61 to 1.139),
revised as of April 1, 2015, on page 545,
§ 1.125–4T is removed.
[FR Doc. 2016–07018 Filed 3–25–16; 8:45 am]
BILLING CODE 1505–01–D
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 165
[Docket No. USCG–2015–0530]
Safety Zones; Annual Events
Requiring Safety Zones in the Captain
of the Port Lake Michigan Zone—
Michigan City Summerfest Fireworks,
Lake Michigan
Coast Guard, DHS.
Notice of enforcement of
regulation.
AGENCY:
ACTION:
The Coast Guard will enforce
the Michigan City Summerfest
Fireworks Safety Zone on a portion of
Lake Michigan on July 4, 2016. This
action is necessary and intended to
ensure safety of life and property on
navigable waters prior to, during, and
immediately after the fireworks display.
During the enforcement period listed
below, the Coast Guard will enforce
restrictions upon, and control
movement of, vessels in the safety zone.
No person or vessel may enter, transit,
SUMMARY:
E:\FR\FM\28MRR1.SGM
28MRR1
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[Federal Register Volume 81, Number 59 (Monday, March 28, 2016)]
[Rules and Regulations]
[Page 17083]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-07018]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
Tax Treatment of Cafeteria Plans
CFR Correction
In Title 26 of the Code of Federal Regulations, Part 1 (Sec. Sec.
1.61 to 1.139), revised as of April 1, 2015, on page 545, Sec. 1.125-
4T is removed.
[FR Doc. 2016-07018 Filed 3-25-16; 8:45 am]
BILLING CODE 1505-01-D
