11956 Federal Register / Vol. 76, No. 43 / Friday, March 4, 2011 / Rules and Regulations 

the servicer submits the monthly 

accounting to HUD. 

(d) At such times as may be 

prescribed by HUD, the servicer, in 

addition to making its monthly 

accounting, shall pay to HUD a 

premium equal to one-half of one 

percent of the average outstanding 

balance during the previous calendar 

year of all the emergency mortgage relief 

loans it serviced during that period. 

That payment shall be accompanied by 

a breakdown of the premium in the form 

prescribed by HUD. 

§ 2700.425 Default. 

(a) If the homeowner fails to make any 

payment or to perform any other 

obligation under the mortgage securing 

the emergency mortgage relief loan, the 

homeowner shall be deemed to be 

delinquent on such loan. 

(b) For purposes of this subpart, the 

date of default shall be the earliest of: 

(1) 30 days after the first day the 

homeowner is delinquent on the 

emergency mortgage relief loan, if the 

delinquency remains uncorrected: 

(2) The date the mortgaged property is 

sold before full repayment of the 

emergency mortgage relief loan; and 

(3) The date a lien superior to that 

securing the emergency mortgage relief 

loan is foreclosed. 

(c) If, after default and prior to the 

foreclosure of the mortgage securing the 

emergency mortgage relief loan, the 

homeowner cures the default, the 

emergency mortgage relief loan shall be 

treated as if the default had not 

occurred, provided the homeowner pays 

the servicer for any expenses the 

servicer incurred in connection with the 

servicer’s attempt to collect on the loan. 

§ 2700.430 Collection. 

(a) If a homeowner defaults on an 

emergency mortgage loan, the servicer 

shall elect: 

(1) To wait while the Department of 

Justice proceeds against the mortgage 

securing the emergency mortgage relief 

loan or attempts to collect on the note, 

and then to make an accounting and 

payment to HUD, as provided in 

§ 2700.435, or 

(2) To make an accounting and 

payment, as provided in § 2700.435, 

without waiting while the Department 

of Justice proceeds against the mortgage 

or note. 

(b) If pursuant to paragraph (a) of this 

section, the servicer elects to make an 

accounting without waiting while the 

Department of Justice proceeds against 

the mortgage or note, the servicer at the 

time of that accounting will have the 

option of purchasing the emergency 

loan and underlying mortgage for a 

price equal to 0.5 times the unpaid 

principal balance. 

§ 2700.435 Payment to HUD. 

(a) Before the expiration of the period 

of 90 days after the date of default, or 

such other time period as HUD 

approves, the servicer shall transmit to 

HUD on the last working day of the 

month the complete credit and 

collection file pertaining to the 

emergency mortgage relief loan. 

(b) At the same time the servicer 

makes the transmittal as provided in 

paragraph (a) of this section, it shall 

share the loss on the emergency 

mortgage relief loan by making a 

payment to HUD in an amount equal to 

10 percent of the sum of: 

(1) The unpaid principal amount of 

the emergency mortgage relief loan, less 

the amount recovered; and 

(2) The uncollected interest earned up 

to the date of the final accounting. 

Accompanying that payment shall be a 

final accounting of the emergency 

mortgage relief loan, in the form 

specified by HUD, and the note and 

mortgage executed in connection with 

the emergency mortgage relief loan. 

(c) Notwithstanding the provisions of 

paragraph (b) of this section, in the 

event that the aggregate loss borne by 

HUD reaches such percent, as specified 

in the Federal Register document 

activating the Emergency Homeowners’ 

Loan Program, of the aggregate amount 

advanced by the servicer on behalf of 

HUD under this subpart, the servicer 

shall bear the burden of any loss in 

excess of that such percent by making 

an appropriate payment to HUD within 

the time period specified in paragraph 

(a) of this section. 

(d) If at the time of default or at any 

time subsequent to default, a person 

primarily or secondarily liable for the 

repayment of an emergency loan is a 

person in ‘‘military service’’, as such 

term is defined in the Servicemembers 

Civil Relief Act of 2003 (Pub. L. 108– 

189, approved December 19, 2003) 

(formerly known as Soldier’s and 

Sailor’s Civil Relief Act of 1940) (50 

U.S.C. app. 501–594), the period the 

servicemember is in military service and 

3 months thereafter and that period 

shall be excluded in computing the time 

within which an accounting and 

payment are to be made pursuant to 

paragraph (a) of this section. 

§ 2700.440 Administrative report and 

examinations. 

HUD may at any time call for a report 

from any servicer on the delinquency 

status of the emergency mortgage relief 

loans serviced by the servicer on behalf 

of HUD or call for such reports as may 

be deemed to be necessary in 

connection with the provisions of this 

part, or HUD may inspect the books or 

accounts of the servicer as they pertain 

to those emergency mortgage relief 

loans. 

Dated: February 28, 2011. 

David H. Stevens, 

Assistant Secretary for Housing—Federal 

Housing Commissioner. 

[FR Doc. 2011–4816 Filed 3–3–11; 8:45 am] 

BILLING CODE 4210–67–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[TD 9515] 

RIN 1545–BH20 

Guidance Under Section 1502; 

Amendment of Matching Rule for 

Certain Gains on Member Stock 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final and temporary 

regulations. 

SUMMARY: This document contains final 

regulations concerning the treatment of 

certain intercompany gain with respect 

to stock owned by members of a 

consolidated group. These regulations 

provide for the redetermination of 

intercompany gain as excluded from 

gross income in certain transactions 

involving stock transfers between 

members of a consolidated group. The 

temporary regulations contained in this 

document are solely for the purpose of 

retaining the portion of the existing 

temporary regulations that were in the 

same temporary regulation section but 

that are not being promulgated as final 

regulations at this time. These 

regulations affect corporations filing 

consolidated returns. 

DATES: Effective Date: These regulations 

are effective on March 4, 2011. 

Applicability Date: Section 1.1502– 

13(c)(6)(ii)(C), (c)(6)(ii)(D), and (c)(7)(ii), 

Examples 16 and 17 apply with respect 

to items taken into account on or after 

March 4, 2011. 

FOR FURTHER INFORMATION CONTACT: John 

F. Tarrant (202) 622–7790 or Lawrence 

M. Axelrod, (202) 622–7713 (not tollfree numbers). 

SUPPLEMENTARY INFORMATION: 

Background 

On March 7, 2008, the IRS and the 

Treasury Department published 

temporary regulations § 1.1502–13T. See 


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Federal Register / Vol. 76, No. 43 / Friday, March 4, 2011 / Rules and Regulations 11957 

TD 9383 (73 FR 12265–01), 2008–15 IRB 

738. Also on March 7, 2008, the IRS and 

the Treasury Department published a 

notice of proposed rulemaking crossreferencing those temporary regulations. 

See REG–137573–07 (73 FR 12312–01), 

2008–15 IRB 750. 

The IRS and the Treasury Department 

did not receive written comments from 

the public during the prescribed 

comment period and no public hearing 

was requested or held. This Treasury 

decision adopts the proposed regulation 

(REG–137573–07) with the changes 

discussed in this preamble. In addition, 

this Treasury decision revises the 

temporary regulation, § 1.1502–13T. 

Summary of Comments and 

Explanation of Revisions 

Finalization of 2008 Temporary 

Regulations 

The 2008 temporary regulations 

concern the treatment of certain 

intercompany gain with respect to 

consolidated group member stock. 

Section 1.1502–13 provides rules 

governing the timing and 

characterization of items resulting from 

transactions between consolidated 

group members. Section 1.1502–13(c) 

provides general rules under which the 

timing and character of those items can 

be deferred or recharacterized to clearly 

reflect the taxable income (and tax 

liability) of the group as a whole. These 

rules generally apply a ‘‘matching’’ 

principle under which the timing of 

inclusion of gain on the sale of property 

by the seller (S) is linked to the buyer’s 

(B) recovery of its basis in the property 

and S and B’s characterization are 

subject to redetermination in order to 

treat S and B as divisions of a single 

corporation. 

The proposed regulations provide that 

intercompany gain with respect to 

member stock may be permanently 

excluded from gross income following 

certain stock basis elimination 

transactions (for example, tax-free spinoffs and liquidations). The IRS and the 

Treasury Department have reconsidered 

the requirement of the proposed 

regulations that, immediately before 

intercompany gain would otherwise be 

taken into account, the common parent 

(P) must be the member that holds the 

member stock with respect to which the 

intercompany gain was realized, and 

that the gain must be P’s intercompany 

item. Given the other requirements of 

the regulation, namely that (i) the group 

has not and will not derive any Federal 

income tax benefit from the 

intercompany transaction; and (ii) the 

excluded gain will not be treated as taxexempt income for purposes of the 

investment adjustment regulations—it is 

appropriate to provide relief where a 

member other than the common parent 

holds the subject stock. Accordingly, 

these final regulations allow the 

exclusion of gain where a member holds 

the target member stock with respect to 

which the intercompany gain was 

realized, and the holding member is 

either (i) B or S, as a successor to the 

other party (either B or S); or (ii) a third 

member that is the successor to both B 

and S. 

The preamble to the proposed 

regulations requested comments as to 

whether the ‘‘Commissioner’s 

Discretionary Rule’’ (§ 1.1502– 

13(c)(6)(ii)(D)) should be retained. The 

preamble also stated that the IRS and 

Treasury Department were considering 

eliminating the Commissioner’s 

Discretionary Rule. Upon further 

consideration, the IRS and Treasury 

Department believe there may be 

circumstances where application of 

such discretion is warranted. Thus, for 

example, the final regulations do not 

provide automatic relief for transactions 

involving property other than member 

stock (such as the stock of nonmembers), but relief may be available 

after review by the IRS under the 

Commissioner’s Discretionary Rule. 

Accordingly, the final regulations retain 

the Commissioner’s Discretionary Rule 

in a form revised to describe the 

conditions to be satisfied for that 

discretion to be exercised, and to 

indicate that relief is available only 

through a request for a letter ruling. 

Finally, the final regulations also 

expressly provide that the excluded gain 

is not treated as tax exempt income for 

purposes of § 1.1502–32 and does not 

increase earnings and profits. 

Reordering of Regulation 

On September 4, 2009, amendments 

to § 1.1502–13T were published in the 

Federal Register to modify the election 

under which a consolidated group can 

avoid immediately taking into account 

an intercompany item after the 

liquidation of a target corporation (the 

2009 temporary regulations). A minor 

correction to the 2009 temporary 

regulations concerning the expiration 

date of the 2009 temporary regulations 

was published in the Federal Register 

on January 13, 2010. The changes made 

by the 2009 temporary regulations 

inadvertently appear in the wrong 

location in the official Federal Register 

version of § 1.1502–13T. Some tax 

services have these provisions in their 

intended places. In order to take into 

account the finalization of the 2008 

temporary regulations, as described in 

this preamble, and to avoid confusion 

concerning the location of the 

amendments made by the 2009 

temporary regulations, this document 

revises § 1.1502–13T and places the 

2009 temporary regulations in the 

proper location. No substantive change 

is intended by this revision. 

Special Analyses 

It has been determined that this 

Treasury decision is not a significant 

regulatory action as defined in 

Executive Order 12866. Therefore, a 

regulatory assessment is not required. It 

has also been determined that section 

553(b) of the Administrative Procedure 

Act (5 U.S.C. chapter 5) does not apply 

to this regulation. Pursuant to the 

Regulatory Flexibility Act (5 U.S.C. 

chapter 6), it is hereby certified that this 

rule will not have a significant 

economic impact on a substantial 

number of small entities. This 

certification is based on the fact that this 

regulation primarily affects members of 

consolidated groups which tend to be 

large corporations. Accordingly, a 

regulatory flexibility analysis is not 

required. Pursuant to section 7805(f) of 

the Internal Revenue Code, the notice of 

proposed rulemaking preceding this 

regulation was submitted to the Chief 

Counsel for Advocacy of the Small 

Business Administration for comment 

on their impact on small business. 

Drafting Information 

The principal author of this regulation 

is John F. Tarrant, Office of Associate 

Chief Counsel (Corporate). However, 

other personnel from the IRS and the 

Treasury Department participated in its 

development. 

List of Subjects in 26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

Adoption of Amendments to the 

Regulations 

Accordingly, 26 CFR part 1 is 

amended as follows: 

PART 1—INCOME TAXES 

■ Paragraph 1. The authority citation 

for part 1 continues to read in part as 

follows: 

Authority: 26 U.S.C. 7805. * * * 

Section 1.1502–13 is also issued under 26 

U.S.C. 1502. 

■ Par. 2. Section 1.1502–13 is amended 

as follows: 

■ 1. Entries for Examples 16 and 17 are 

added to the table of examples for 

§ 1.1502–13(c)(7)(ii) in paragraph 

(a)(6)(ii). 


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11958 Federal Register / Vol. 76, No. 43 / Friday, March 4, 2011 / Rules and Regulations 

■ 2. Paragraphs (c)(6)(ii)(C), (c)(6)(ii)(D) 

are revised and Examples 16 and 17 are 

added to paragraph (c)(7)(ii). 

■ 3. Paragraph (c)(7(iii) is added. 

■ 4. Paragraph (f)(7)(i) Examples 8 and 

9 and paragraph (f)(7)(ii) are removed. 

■ 5. Paragraph (f)(7)(i) is redesignated as 

(f)(7). 

The revisions and additions read as 

follows: 

§ 1.1502–13 Intercompany transactions. 

(a) * * * 

(6) * * * 

(ii) * * * 

Matching rule (§ 1.1502–13(c)(7)(ii)) 

* * * * * 

Example 16. Intercompany stock 

distribution followed by section 332 

liquidation. 

Example 17. Intercompany stock sale 

followed by section 355 distribution. 

* * * * * 

(c) * * * 

(6) * * * 

(ii) * * * 

(C) Certain intercompany gains on 

stock—(1) In general. Notwithstanding 

paragraph (c)(6)(ii)(A)(1) of this section, 

intercompany gain with respect to a 

member’s stock that was created by 

reason of an intercompany transfer of 

the stock, and that would not otherwise 

be taken into account upon a 

subsequent elimination of the stock’s 

basis but for the transfer, is 

redetermined to be excluded from gross 

income if— 

(i) B or S becomes a successor (as 

defined in paragraph (j)(2) of this 

section) to the other party (either B or 

S), or a third member becomes a 

successor to both B and S; 

(ii) Immediately before the 

intercompany gain would be taken into 

account, the successor member holds 

the member’s stock with respect to 

which the intercompany gain was 

realized; 

(iii) The successor member’s basis in 

the member’s stock that reflects the 

intercompany gain that is taken into 

account is eliminated without the 

recognition of gain or loss (and such 

eliminated basis is not further reflected 

in the basis of any successor asset); 

(iv) The effects of the intercompany 

transaction have not previously been 

reflected, directly or indirectly, on the 

group’s consolidated return; and 

(v) The group has not derived, and no 

taxpayer will derive, any Federal 

income tax benefit from the 

intercompany transaction that gave rise 

to the intercompany gain or the 

redetermination of the intercompany 

gain (including any adjustment to basis 

in member stock under § 1.1502–32). 

For this purpose, the redetermination of 

the intercompany gain is not itself 

considered a Federal income tax benefit. 

(2) Effect on earnings and profits and 

investment adjustments. Any amount 

excluded from gross income under 

paragraph (c)(6)(ii)(C)(1) of this section 

shall not be taken account as earnings 

and profits of any member and shall not 

be treated as tax-exempt income under 

§ 1.1502–32(b)(2)(ii). 

(D) Other amounts. (1) The 

Commissioner may determine that 

treating S’s intercompany item as 

excluded from gross income is 

consistent with the purposes of this 

section and other applicable provisions 

of the Internal Revenue Code, 

regulations, and published guidance, if 

the following conditions are met, 

depending on whether the 

intercompany item is an item of income 

or an item of gain, 

(i) In the case of an intercompany item 

of income, the corresponding item is 

permanently disallowed; or 

(ii) If the intercompany item 

constitutes gain, the conditions 

described in paragraphs 

(c)(6)(ii)(C)(1)(iv) and (c)(6)(ii)(C)(1)(v) of 

this section are satisfied. 

(2) A determination by the 

Commissioner may be obtained only 

through a letter ruling request. 

(7) * * * 

(ii) * * * 

* * * * * 

Example 16. Intercompany stock 

distribution followed by section 332 

liquidation. (a) Facts. P owns all of the stock 

of S, S owns all the stock of T, a member of 

the P group, and T owns all of the stock of 

T1, also a member of the P group. On January 

1 of Year 1, S distributes all of the T stock 

to P in a distribution to which section 301 

applies. At the time of this distribution, the 

value of the T stock is $100 and S has a $40 

basis in the T stock. Under section 311(b), the 

distribution creates $60 of intercompany gain 

to S. Under section 301(d), P’s basis in the 

T stock is $100. S will take its $60 

intercompany gain into account under the 

matching rule. On January 1 of Year 4, in an 

independent transaction, S distributes all of 

its assets to P in a complete liquidation to 

which section 332 applies, and, under 

paragraph (j)(2) of this section, P succeeds to 

S’s $60 gain. On January 1 of Year 7, T 

distributes all of its T1 stock to P in a 

transaction to which section 355 applies. At 

the time of this distribution, P has a basis in 

the T stock of $100, the value of the T stock 

(without regard to T1) is $75, and the value 

of the T1 stock is $25. Under section 358, P 

allocates $25 of its $100 basis in the T stock 

to the T1 stock, and, under paragraph (j)(1) 

of this section, the T1 stock becomes a 

successor asset to the T stock. On January 1 

of Year 9, in an independent transaction, T 

distributes all of its assets to P in a complete 

liquidation to which section 332 applies. 

(b) Analysis. Under paragraphs (b)(1) and 

(f)(2) of this section, S’s distribution in Year 

1 of the T stock to P is an intercompany 

transaction, S is the selling member, and P 

is the buying member. In Year 9 when T 

liquidates, P has no gain or loss under 

section 332. Under paragraph (b)(3)(ii) of this 

section, P’s $0 gain or loss with respect to the 

T stock under section 332 is a corresponding 

item. P takes $45 (75/100 × $60) of its 

intercompany gain into account under the 

matching rule in Year 9 to reflect the 

difference between P’s $0 of unrecognized 

gain and P’s $45 of recomputed unrecognized 

gain. (If P and S were divisions of a single 

corporation, P would have had a $40 basis in 

the T stock, and, after the Year 7 distribution 

of the T1 stock, would have held the T stock 

with a $30 basis.) However, paragraph (c)(6) 

of this section does not prevent the 

redetermination of P’s intercompany gain as 

excluded from gross income provided P 

succeeds to S’s intercompany item; P and S 

are a single entity; P’s basis in the T stock 

that reflects the $45 intercompany gain taken 

into account is eliminated without the 

recognition of gain or loss (and this 

eliminated basis is not further reflected in the 

basis of any successor asset); the group has 

not derived and no taxpayer will derive any 

Federal income tax benefit from the basis in 

the T stock and will not derive any Federal 

income tax benefit from a redetermination of 

this portion of the gain; and the effects of the 

intercompany transaction have not 

previously been reflected, directly or 

indirectly, on the P group’s consolidated 

return. (See paragraph (c)(6)(ii)(C) of this 

section.) Accordingly, under paragraph 

(c)(6)(ii)(C) of this section, the $45 

intercompany gain that P takes into account 

is redetermined to be excluded from gross 

income. P’s basis in its T1 stock continues to 

reflect $15 of intercompany gain. 

Example 17. Intercompany stock sale 

followed by section 355 distribution. (a) 

Facts. The facts are the same as Example 16, 

except that T does not distribute the stock of 

T1, instead, in Year 7, T makes a distribution 

of $50 to P in a transaction to which section 

301 applies. Under § 1.1502–32, P’s basis in 

its T stock is reduced by $50 and, under 

paragraph (f)(2)(ii) of this section, the 

intercompany distribution is excluded from 

P’s gross income. Further, in Year 9, instead 

of liquidating T, P distributes the T stock to 

its shareholders in a transaction to which 

section 355 applies. 

(b) Analysis. On the distribution of the T 

stock in Year 9, P has $0 of unrecognized 

gain under section 355(c). Under paragraph 

(b)(3)(ii) of this section, P’s $0 of 

unrecognized gain or loss with respect to the 

T stock under section 355(c) is a 

corresponding item. P takes its $60 

intercompany gain into account under the 

matching rule in Year 9 to reflect the 

difference between P’s $0 of unrecognized 

gain and P’s $60 of recomputed gain ($50 

unrecognized gain and $10 recognized gain). 

(If P and S were divisions of a single 

corporation, P would have had a $40 basis in 

the T stock, and, after the Year 7 distribution, 

would have held the T stock with a $10 

excess loss account.) See paragraph (f)(7), 

Example 2 of this section. Paragraph (c)(6) of 

this section does not prevent the 

redetermination of P’s intercompany gain as 


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Federal Register / Vol. 76, No. 43 / Friday, March 4, 2011 / Rules and Regulations 11959 

excluded from gross income provided P 

succeeds to S’s intercompany item; P and S 

are a single entity; P’s basis in the T stock 

that reflects the $60 intercompany gain taken 

into account is eliminated without the 

recognition of gain or loss (and this 

eliminated basis is not further reflected in 

any successor asset); the group has not 

derived any Federal income tax benefit from 

the basis in the T stock and will not derive 

any Federal income tax benefit from a 

redetermination of this portion of the gain; 

and the effects of the intercompany 

transaction have not previously been 

reflected, directly or indirectly, on the P 

group’s consolidated return. (See paragraph 

(c)(6)(ii)(C) of this section.) The 

intercompany transaction with respect to the 

T stock resulted in an increase in the basis 

of the T stock, and this increase in the basis 

of the T stock prevented P from holding the 

T stock with a $10 excess loss account (as a 

result of the Year 7 distribution) at the time 

of the section 355 distribution. Accordingly, 

the group derived a Federal income tax 

benefit from the intercompany transaction to 

the extent of $10 and, under paragraph 

(c)(6)(ii)(C) of this section, only $50 of the 

$60 intercompany gain that P takes into 

account is redetermined to be excluded from 

gross income. 

(c) Application of section 355(e). If it were 

determined that section 355(e) applied to P’s 

distribution of the T stock, P would recognize 

$0 of gain and derive a Federal income tax 

benefit to the extent of the full $60 increase 

in the basis of the T stock. Therefore, no 

portion of P’s intercompany gain would be 

redetermined to be excluded from gross 

income under paragraph (c)(6)(ii)(C) of this 

section. 

(iii) Effective/applicability date—(A) 

In general. Paragraphs (c)(6)(ii)(C), 

(c)(6)(ii)(D), and (c)(7)(ii), Examples 16 

and 17 of this section apply with respect 

to items taken into account on or after 

March 4, 2011. 

(B) Prior periods. For items taken into 

account on or after March 7, 2008, and 

before March 4, 2011, see § 1.1502– 

13T(c)(6)(ii)(C) and (f)(7), Examples 7 

and 8 as contained in 26 CFR part 1 in 

effect on April 1, 2009. For items taken 

into account before March 7, 2008, see 

§ 1.1502–13 as contained in 26 CFR part 

1 in effect on April 1, 2007. 

* * * * * 

■ Par. 3. Section 1.1502–13T is revised 

to read as follows: 

§ 1.1502–13T Intercompany transactions 

(temporary). 

(a) through (f)(5)(ii)(A) [Reserved]. For 

further guidance see § 1.1502–13(a) 

through (f)(5)(ii)(A). 

(B) Section 332—(1) In general. If 

section 332 would otherwise apply to 

T’s (old T’s) liquidation into B, and B 

transfers substantially all of old T’s 

assets to a new member (new T), and if 

a direct transfer of substantially all of 

old T’s assets to new T would qualify 

as a reorganization described in section 

368(a), then, for all Federal income tax 

purposes, T’s liquidation into B and B’s 

transfer of substantially all of old T’s 

assets to new T will be disregarded and 

instead, the transaction will be treated 

as if old T transferred substantially all 

of its assets to new T in exchange for 

new T stock and the assumption of T’s 

liabilities in a reorganization described 

in section 368(a). (Under § 1.1502– 

13(j)(1), B’s stock in new T would be a 

successor asset to B’s stock in old T, and 

S’s gain would be taken into account 

based on the new T stock.) 

(2) Time limitation and adjustments. 

The transfer of old T’s assets to new T 

qualifies under paragraph (f)(5)(ii)(B)(1) 

of this section only if B has entered into 

a written plan, on or before the due date 

of the group’s consolidated income tax 

return (including extensions), to transfer 

the T assets to new T, and the statement 

described in paragraph (f)(5)(ii)(E) of 

this section is included on or with a 

timely filed consolidated tax return for 

the tax year that includes the date of the 

liquidation (including extensions). 

However, see paragraph (f)(5)(ii)(F) of 

this section for certain situations in 

which the plan may be entered into after 

the due date of the return and the 

statement described in paragraph 

(f)(5)(ii)(E) of this section may be 

included on either an original tax return 

or an amended tax return filed after the 

due date of the return. In either case, the 

transfer of substantially all of T’s assets 

to new T must be completed within 12 

months of the filing of the return. 

Appropriate adjustments are made to 

reflect any events occurring before the 

formation of new T and to reflect any 

assets not transferred to new T, or 

liabilities not assumed by new T. For 

example, if B retains an asset of old T, 

the asset is treated under § 1.1502– 

13(f)(3) as acquired by new T but 

distributed to B immediately after the 

reorganization. 

(f)(5)(ii)(B)(3) through (f)(5)(ii)(E) 

[Reserved]. For further guidance, see 

§ 1.1502–13(f)(5)(ii)(B)(3) through 

(f)(5)(ii)(E). 

(F) Effective/Applicability dates—(1) 

General rule. Paragraphs (f)(5)(ii)(B)(1) 

and (f)(5)(ii)(B)(2) of this section apply 

to transactions in which old T’s 

liquidation into B occurs on or after 

October 25, 2007. 

(2) Prior periods. For transactions in 

which old T’s liquidation into B occurs 

before October 25, 2007, see § 1.1502– 

13(f)(5)(ii)(B)(1) and (f)(5)(ii)(B)(2) in 

effect prior to October 25, 2007 as 

contained in 26 CFR part 1, revised 

April 1, 2009. 

(3) Special rule for tax returns filed 

before November 3, 2009. In the case of 

a liquidation on or after October 25, 

2007, by a taxpayer whose original tax 

return for the year of liquidation was 

filed on or before November 3, 2009, 

then, notwithstanding paragraph 

(f)(5)(ii)(B)(2) of this section and 

§ 1.1502–13(f)(5)(ii)(E), the election to 

apply paragraph (f)(5)(ii)(B) of this 

section may be made by entering into 

the written plan described in paragraph 

(f)(5)(ii)(B) of this section on or before 

November 3, 2009, including the 

statement described in § 1.1502– 

13(f)(5)(ii)(E) on or with an original tax 

return or an amended tax return for the 

tax year that includes the liquidation 

filed on or before November 3, 2009, 

and transferring substantially all of T’s 

assets to new T within 12 months of the 

filing of such original or amended 

return. 

(G) Expiration date. These temporary 

regulations will expire on September 3, 

2012. 

Steven T. Miller, 

Deputy Commissioner for Services and 

Enforcement. 

Approved: February 24, 2011. 

Michael Mundaca, 

Assistant Secretary of the Treasury (Tax 

Policy). 

[FR Doc. 2011–4846 Filed 3–3–11; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[Docket No. USCG–2011–0066] 

Drawbridge Operation Regulations; 

Hackensack River, Jersey City, NJ, 

Maintenance 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of temporary deviation 

from regulations. 

SUMMARY: The Commander, First Coast 

Guard District, has issued a temporary 

deviation from the regulation governing 

the operation of the Witt Penn Bridge at 

mile 3.1, across the Hackensack River, at 

Jersey City, New Jersey. The deviation is 

necessary to perform bridge 

maintenance. This deviation allows the 

bridge owner to require a two-hour 

advance notice for bridge openings. 

DATES: This deviation is effective from 

April 4, 2011 through May 8, 2011. 

ADDRESSES: Documents mentioned in 

this preamble as being available in the 

docket are part of docket USCG–2011– 

0066 and are available online at 


jdjones on DSK8KYBLC1PROD with RULES2