Unified Rule for Loss on Subsidiary Stock

Federal Register: September 17, 2008 (Volume 73, Number 181)

Proposed Rules

Page 53793

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

DOCID:fr17se08-41

DEPARTMENT OF THE TREASURY

Internal Revenue Service 26 CFR Part 1

RIN 1545-BB67

REG-157711-02

Unified Rule for Loss on Subsidiary Stock

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Partial withdrawal of notice of proposed rulemaking.

SUMMARY: This document withdraws proposed regulations relating to the application of section 362(e)(2) to intercompany transactions and to certain modifications to the investment adjustment rules.

FOR FURTHER INFORMATION CONTACT: Marcie P. Barese, (202) 622-7790 (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background and Explanation of Provisions

On January 23, 2007, the IRS and Treasury Department published a notice of proposed rulemaking in the Federal Register (72 FR 2964) under Sec. 1.1502-36 (Unified Loss Rule). The proposed regulations provided rules under Sec. 1.1502-13(e)(4) that would suspend the application of section 362(e)(2) in the case of intercompany transactions. The proposed regulations also provided rules under Sec. 1.1502-32(c)(1)(ii) relating to the treatment of items attributable to property transferred in an intercompany section 362(e)(2) transaction.

After consideration of the comments received responding to the notice of proposed rulemaking, the IRS and Treasury Department have concluded that the proposed rules would not be promulgated and, instead, that final regulations would make section 362(e)(2) generally inapplicable to intercompany transactions. Accordingly, Sec. Sec. 1.1502-13(e)(4) and 1.1502-32(c)(1)(ii) of the proposed regulations are hereby withdrawn.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements.

Partial Withdrawal of Proposed Regulations

Accordingly, under the authority of 26 U.S.C. 7805, proposed

Sec. Sec. 1.1502-13(e)(4) and 1.1502-32(c)(1)(ii) published in the

Federal Register on January 23, 2007 are withdrawn.

Linda E. Stiff,

Deputy Commissioner for Services and Enforcement.

FR Doc. E8-21005 Filed 9-9-08; 4:15 pm

BILLING CODE 4830-01-P