[Federal Register Volume 78, Number 167 (Wednesday, August 28, 2013)]
[Rules and Regulations]
[Pages 53026-53027]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-20491]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9619]
RIN 1545-BD84


Regulations Enabling Elections for Certain Transaction Under 
Section 336(e); Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

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SUMMARY: This document contains amendments to correct errors in final 
regulations [TD 9619] that provide guidance under section 336(e) of the 
Internal Revenue Code (CODE), which authorizes the issuance of 
regulations under which an election may be made to treat sale, exchange 
or distribution of at least 80 percent of the voting power and value of 
the stock of a corporation (target) as a sale of all its underlying 
assets. These regulations were published in the Federal Register on 
Wednesday, May 15, 2013.

DATES: This correction is effective on August 28, 2013, and is 
applicable beginning May 15, 2013.

FOR FURTHER INFORMATION CONTACT: Mark J. Weiss, (202) 622-7930 (not a 
toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    The final regulations (TD 9619) that are the subject of this 
correction are under section 336(e) of the Code.

Need for Correction

    As published May 15, 2013 [78 FR 28467] TD 9619 contains errors 
that may prove to be misleading and is 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:

[[Page 53027]]

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. In Sec.  1.336-2, paragraphs (b)(1)(i)(C) and (h)(8) Example 2. 
(ii) are revised to read as follows:


Sec.  1.336-2  Availability, mechanics, and consequences of section 
336(e) election.

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (C) Tiered targets. In the case of parent-subsidiary chains of 
corporations making section 336(e) elections, the deemed asset 
disposition of a higher-tier subsidiary is considered to precede the 
deemed asset disposition of a lower-subsidiary.
* * * * *
    (h) * * *
    (8) * * *
    Example 2. * * *
    (ii) Making of election for S Corporation Target. Because S 
Corporation Target is an S Corporation Target, in order to make a 
section 336(e) election for the qualified stock disposition of S 
Corporation Target, the requirements of paragraph (h)(3) of this 
section must be satisfied. On or before the due date of S Corporation 
Target's Federal income tax return that includes Date 1, A, B, C, and S 
Corporation Target must enter into a written, binding agreement to make 
a section 336(e) election; S Corporation Target must retain a copy of 
the written agreement; and S Corporation Target must attach the section 
336(e) election statement to its timely filed Federal income tax return 
for the taxable year that includes Date 1.
* * * * *

0
 Par. 3. Section 1.1502-13 is amended by revising the heading of 
paragraph (f)(5)(ii)(C) to read as follows:


Sec.  1.1502-13  Intercompany transactions.

* * * * *
    (f) * * *
    (5) * * *
    (ii) * * *
    (C) Sections 338(h)(10) and 336(e). * * *
* * * * *

Martin V. Franks,
 Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel, (Procedure and Administration).
[FR Doc. 2013-20491 Filed 8-27-13; 8:45 am]
BILLING CODE 4830-01-P