[Federal Register Volume 78, Number 157 (Wednesday, August 14, 2013)]
[Rules and Regulations]
[Pages 49366-49367]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-19680]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9623]
RIN 1545-BI99


Application of Section 108(i) to Partnerships and S Corporations; 
Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendments.

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SUMMARY: This document contains corrections to final regulations and 
removal of temporary regulations (TD 9623) that were published in the 
Federal Register on Wednesday, July 3, 2013 (78 FR 39973). The final 
regulations are relating to the application of section 108(i) of the 
Internal Revenue Code to partnerships and S corporations and provides 
rules regarding the deferral of discharge of indebtedness income and 
original issue discount deductions by a partnership or an S corporation 
with respect to reacquisitions of applicable debt instruments after 
December 31, 2008, and before January 1, 2011.

DATES: This correction is effective on August 14, 2013 and applicable 
on or after July 2, 2013.

FOR FURTHER INFORMATION CONTACT: Joseph R. Worst, at (202) 622-3070 
(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    The final regulations and removal of temporary regulations (TD 
9623) that are the subject of this correction are under section 108(i) 
of the Internal Revenue Code.

Need for Correction

    As published, the final regulations and removal of temporary 
regulations (TD 9623) contains 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 1.108(i)-2 is amended by revising paragraphs 
(b)(6)(i)(A)(4), (c)(3)(i)(A)(5), and (d)(2)(iii) Example 2. (ii) to 
read as follows:


Sec.  1.108(i)-2  Application of section 108(i) to partnerships and S 
Corporations.

* * * * *
    (b) * * *
    (6) * * *
    (i) * * *
    (A) * * *
    (4) In the taxable year that includes the day before the day on 
which the electing partnership files a petition in a title 11 or 
similar case.
* * * * *
    (c) * * *
    (3) * * *
    (i) * * *
    (A) * * *
    (5) In the taxable year that includes the day before the day on 
which the electing S corporation files a petition in a title 11 or 
similar case.
* * * * *
    (d) * * *
    (2) * * *
    (iii) * * *
    Example 2. * * *
    (ii) Under paragraph (d)(2) of this section, ABC partnership's 
deferred OID deduction

[[Page 49367]]

for 2012 is the lesser of: $23.25 ($31 of OID that accrues on the 
new debt instrument in 2012 less $7.75 of this OID that is allowed 
as a deduction to A in 2012) or $9.75 (the excess of $75 (ABC 
partnership's deferred COD income of $150 less A's share of ABC 
partnership's deferred COD income that is included in A's income for 
2012 of $75) over $65.25 (the aggregate amount of OID that accrued 
in previous taxable years of $87 less the aggregate amount of such 
OID that has been allowed as a deduction by A in 2012 of $21.75)). 
Thus, of the $31 of OID that accrues in 2012, $9.75 is deferred 
under section 108(i).
* * * * *

Martin V. Franks,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel, (Procedure and Administration).
[FR Doc. 2013-19680 Filed 8-13-13; 8:45 am]
BILLING CODE 4830-01-P