13648 Federal Register / Vol. 86, No. 45 / Wednesday, March 10, 2021 / Rules and Regulations 

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

■ Par. 2. Section 1.1297–0 is amended 

by revising the entry for § 1.1297– 

2(g)(12) to read as follows: 

§ 1.1297–0 Table of contents. 

* * * * * 

§ 1.1297–2 Special rules regarding lookthrough subsidiaries and look-through 

partnerships. 

* * * * * 

(g) * * * 

(12) TFC obligation. 

* * * * * 

■ Par. 3. Section 1.1297–1 is amended 

by: 

■ a. Removing ‘‘§ 1.1297–2(b)(2)(i))’’ in 

the first sentence of paragraph 

(d)(1)(v)(C)(1) and adding in its place 

‘‘§ 1.1297–2(b)(2)(i)’’. 

■ b. Revising paragraph (f)(8). 

The revision reads as follows: 

§ 1.1297–1 Definition of passive foreign 

investment company. 

* * * * * 

(f) * * * 

(8) Related person. For purposes of 

applying the rules of this section and 

§ 1.1297–2 with respect to section 

1297(b)(2)(C), the term means a related 

person within the meaning of section 

954(d)(3). 

* * * * * 

■ Par. 4. Section 1.1297–2 is amended 

by: 

■ a. Removing ‘‘of this section))’’ in the 

first sentence of paragraph (b)(3)(i) and 

adding in its place ‘‘of this section)’’. 

■ b. Revising the first sentence of 

paragraph (c)(4)(iii)(B). 

■ c. Removing ‘‘PFIC .’’ at the end of 

paragraph (e)(3)(i)(B)(1) and adding in 

its place ‘‘PFIC.’’ 

■ d. Revising the first sentence of 

paragraph (g)(4)(iv)(A)(2)(iii). 

The revisions read as follows: 

§ 1.1297–2 Special rules regarding lookthrough subsidiaries and look-through 

partnerships. 

* * * * * 

(c) * * * 

(4) * * * 

(iii) * * * 

(B) * * * The results are the same as 

in paragraph (c)(4)(ii)(B) of this section 

(the results in Example 2), except that 

TFC’s assets also do not include the 

stock of LTS2. 

* * * 

* * * * * 

(g) * * * 

(4) * * * 

(iv) * * * 

(A) * * * 

(2) * * * 

(iii) * * * For purposes of paragraph 

(b)(3) of this section, FPS qualifies as a 

look-through partnership because TFC 

satisfies the active partner tests of both 

paragraphs (g)(4)(ii)(A) and (B) of this 

section. * * * 

* * * * * 

■ Par. 5. Section 1.1297–4 is amended 

by: 

■ a. Revising paragraph (d)(6). 

■ b. Removing ‘‘written by a’’ in 

paragraph (f)(5) and adding in its place 

‘‘written by, a’’. 

The revision reads as follows: 

§ 1.1297–4 Qualifying insurance 

corporation. 

* * * * * 

(d) * * * 

(6) Stock ownership. For purposes of 

this section, ownership of stock in a 

foreign corporation means either direct 

ownership of such stock or indirect 

ownership determined using the rules 

specified in § 1.1291–1(b)(8) (but 

without regard to the 50 percent 

ownership requirement of § 1.1291– 

1(b)(8)(ii)(A)). 

* * * * * 

■ Par. 6. Section 1.1298–2 is amended 

by revising the second sentence of 

paragraph (c)(3), the second sentence of 

paragraph (f)(1)(i)(B), and the first 

sentence of paragraph (f)(2)(ii) to read as 

follows: 

§ 1.1298–2 Rules for certain corporations 

changing businesses. 

* * * * * 

(c) * * * 

(3) * * * However, if activities 

performed by the officers and 

employees of a look-through subsidiary 

of a corporation or of a look-through 

partnership (including a look-through 

subsidiary or a look-through partnership 

with respect to which paragraph (d) of 

this section applies) would be taken into 

account by the corporation pursuant to 

§ 1.1297–2(e) if it applied, such 

activities are taken into account for 

purposes of the determination of the 

existence of an active trade or business 

and the determination of whether assets 

are used in an active trade or business. 

* * * * * 

(f) * * * 

(1) * * * 

(i) * * * 

(B) * * * The residual gain computed 

under § 1.1297–2(f)(2) on the sale of the 

FS stock is $10x. * * * 

* * * * * 

(2) * * * 

(ii) * * * The results are the same as 

in paragraph (f)(1)(ii) of this section (the 

results in Example 1), except that under 

paragraph (c)(1) of this section, the 

passive income considered attributable 

to proceeds from a disposition of one or 

more active trades or businesses is $4x 

(from investment of disposition 

proceeds). * * * 

* * * * * 

§ 1.1298–4 [Amended] 

■ Par. 7. Section 1.1298–4(f) is amended 

by removing ‘‘Janyuary’’ and adding in 

its place ‘‘January’’. 

Crystal Pemberton, 

Senior Federal Register Liaison, Legal 

Processing Division, Associate Chief Counsel 

(Procedure and Administration). 

[FR Doc. 2021–04789 Filed 3–9–21; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[TD 9936] 

RIN 1545–BO59 

Guidance on Passive Foreign 

Investment Companies; Correction 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final regulations; correction. 

SUMMARY: This document contains 

corrections to the final regulations 

(Treasury Decision 9936), that were 

published in the Federal Register on 

Friday, January 15, 2021. The final 

regulations regarding the determination 

of whether a foreign corporation is 

treated as a passive foreign investment 

company (‘‘PFIC’’) for purposes of the 

Internal Revenue Code (‘‘Code’’), and 

the application and scope of certain 

rules that determine whether a United 

States person that indirectly holds stock 

in a PFIC is treated as a shareholder of 

the PFIC. 

DATES: These corrections are effective 

on March 10, 2021 and applicable on or 

after January 15, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Concerning the regulations §§ 1.1291–0 

and 1.1291–1, 1.1297–0 through 1.1297– 

2, 1.1298–0, 1.1298–2, and 1.1298–4, 

Christina G. Daniels at (202) 317–6934; 

concerning the regulations §§ 1.1297–4 

and 1.1297–6, Josephine Firehock at 

(202) 317–4932 (not toll-free numbers). 

SUPPLEMENTARY INFORMATION: 

Background 

The final regulations (TD 9936) that 

are the subject of this correction are 

issued under sections 1297 and 1298 of 

the Internal Revenue Code. 

Federal Register / Vol. 86, No. 45 / Wednesday, March 10, 2021 / Rules and Regulations 13649 

Need for Correction 

As published the final regulations (TD 

9936) that contain errors that need to be 

corrected. 

Correction of Publication 

Accordingly, the final regulations (TD 

9936) that are the subject of FR Doc. 

2020–27009, which published on 

January 15, 2021 (86 FR 4516), are 

corrected as follows: 

1. On page 4532, the third column, 

the ninth line from the bottom of the 

last partial paragraph, the language 

‘‘claims’’ is corrected to read ‘‘claims,’’. 

2. On page 4534, the third column, 

the tenth line from the bottom of the 

first partial paragraph, the language 

‘‘1000’’ is corrected to read ‘‘1,000’’. 

3. On page 4541, the third column, 

the last line of the third paragraph by 

removing the language ‘‘Id.’’. 

4. On page 4553, the second column, 

the last line of the first full paragraph, 

the language ‘‘[X]’’ is corrected to read 

‘‘1545–1002’’. 

Crystal Pemberton, 

Senior Federal Register Liaison, Legal 

Processing Division, Associate Chief Counsel 

(Procedure and Administration). 

[FR Doc. 2021–04790 Filed 3–9–21; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[Docket Number USCG–2021–0133] 

RIN 1625–AA87 

Security Zone; San Diego Bay, San 

Diego, CA 

AGENCY: Coast Guard, DHS. 

ACTION: Temporary final rule. 

SUMMARY: The Coast Guard is 

establishing a temporary security zone 

for all navigable waters within a 200- 

yard radius of the U.S. Coast Guard 

Cutter (USCGC) BERTHOLF while 

berthed at 10th Avenue Marine 

Terminal in San Diego, CA. The security 

zone is needed to protect the military 

vessel, personnel in and around the 

military vessel, navigable waterways, 

and waterfront facilities. Entry of 

vessels or persons into this zone is 

prohibited unless specifically 

authorized by the Captain of the Port 

San Diego. 

DATES: This rule is effective from 8:30 

a.m. until 10:30 a.m. on March 10, 2021. 

ADDRESSES: To view documents 

mentioned in this preamble as being 

available in the docket, go to https://

www.regulations.gov, type USCG–2021– 

0133 in the ‘‘SEARCH’’ box and click 

‘‘SEARCH.’’ Click on Open Docket 

Folder on the line associated with this 

rule. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this rule, call or 

email Lieutenant John Santorum, 

Waterways Management, U.S. Coast 

Guard Sector San Diego, CA; telephone 

619–278–7656, email MarineEventsSD@

uscg.mil. 

SUPPLEMENTARY INFORMATION: 

I. Table of Abbreviations 

CFR Code of Federal Regulations 

DHS Department of Homeland Security 

FR Federal Register 

NPRM Notice of proposed rulemaking 

§ Section 

U.S.C. United States Code 

II. Background Information and 

Regulatory History 

The Coast Guard is issuing this 

temporary rule without prior notice and 

opportunity to comment pursuant to 

authority under section 4(a) of the 

Administrative Procedure Act (APA) (5 

U.S.C. 553(b)). This provision 

authorizes an agency to issue a rule 

without prior notice and opportunity to 

comment when the agency for good 

cause finds that those procedures are 

‘‘impracticable, unnecessary, or contrary 

to the public interest.’’ Under 5 U.S.C. 

553(b)(B), the Coast Guard finds that 

good cause exists for not publishing a 

notice of proposed rulemaking (NPRM) 

with respect to this rule because it 

would be impracticable based on the 

unpredictable nature of vessel 

operations and the fact that details of 

the port call were not finalized until 

March 3, 2021. This security zone is 

required to protect the military vessel, 

personnel in and around the military 

vessel, navigable waterways, and 

waterfront facilities while the vessel is 

docked at the 10th Avenue Marine 

Terminal. It is impracticable to publish 

an NPRM because we must establish 

this security zone by March 10, 2021. 

Under 5 U.S.C. 553(d)(3), the Coast 

Guard finds that good cause exists for 

making this rule effective less than 30 

days after publication in the Federal 

Register. Delaying the effective date of 

this rule would be impracticable 

because the security zone is needed on 

March 10, 2021 to provide for the 

security of the military vessel, personnel 

in and around the military vessel, 

navigable waterways, and waterfront 

facilities while the vessel is docked at 

the 10th Avenue Marine Terminal. 

III. Legal Authority and Need for Rule 

The Coast Guard is issuing this rule 

under authority in 46 U.S.C. 70034. The 

Captain of the Port Sector San Diego 

(COTP) has determined that the 

presence of the military vessel at this 

location presents a potential target for 

terrorist attack, sabotage, or other 

subversive acts, accidents, or other 

causes of similar nature. This rule is 

needed to protect the military vessel, 

personnel in and around the military 

vessel, navigable waterways, and 

waterfront facilities while the vessel is 

docked at the 10th Avenue Marine 

Terminal. 

IV. Discussion of the Rule 

This rule establishes a security zone 

from 8:30 a.m. until 10:30 a.m. on 

March 10, 2021. The security zone will 

cover all navigable waters within a 200- 

yard radius around the USCGC 

BERTHOLF while berthed at 10th 

Avenue Marine Terminal in San Diego, 

CA. The duration of the zone is 

intended to protect the military vessel, 

personnel in and around the military 

vessel, navigable waterways, and 

waterfront facilities while the vessel is 

docked at the 10th Avenue Marine 

Terminal. No vessel or person will be 

permitted to enter the security zone 

without obtaining permission from the 

COTP or a designated representative. 

V. Regulatory Analyses 

We developed this rule after 

considering numerous statutes and 

Executive orders related to rulemaking. 

Below we summarize our analyses 

based on a number of these statutes and 

Executive orders, and we discuss First 

Amendment rights of protestors. 

A. Regulatory Planning and Review 

Executive Orders 12866 and 13563 

direct agencies to assess the costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits. 

This rule has not been designated a 

‘‘significant regulatory action,’’ under 

Executive Order 12866. Accordingly, 

this rule has not been reviewed by the 

Office of Management and Budget 

(OMB). 

This regulatory action determination 

is based on the size, location, and 

limited duration of the security zone. 

This zone impacts a small designated 

area of the San Diego Bay for a very 

limited period. Furthermore, vessel 

traffic can safely transit around the 

security zone.