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###### Department of the Treasury

###### Internal Revenue Service

          - 26 CFR Part 1
          - [TD 9424]
          - RIN 1545-BB61

# AGENCY:

Internal Revenue Service (IRS), Treasury.

# ACTION:

Correcting amendment.

# SUMMARY:

                        This document contains a correction to final regulations (TD 9424) that were published in the                         **Federal Register**                         on Wednesday, September 17, 2008 (73 FR 53934).                    

The regulations apply to corporations filing consolidated returns, and corporations that enter into certain tax-free reorganizations. The regulations provide rules for determining the tax consequences of a member's transfer (including by deconsolidation and worthlessness) of loss shares of subsidiary stock.

# DATES:

*Effective Date:*                         This correction is effective on March 5, 2010, and is applicable on September 17, 2008.                    

# FOR FURTHER INFORMATION CONTACT:

Maury Passman, (202) 622-7550 or Theresa Abell, (202) 622-7700 (not toll-free numbers).

# SUPPLEMENTARY INFORMATION:

## Background

The final regulations (TD 9424) that are the subject of this document are under sections 337, 358, 362 and 1502 of the Internal Revenue Code.

## Need for Correction

As published, the final regulations (TD 9424) contain an error that may prove to be misleading and is in need of clarification. The final regulations revised § 1.1502-35(a) to provide that, in general, § 1.1502-35 would only apply to transactions completed prior to September 17, 2008. The final regulations also revised the operative rules in § 1.1502-35. However, the effective date prescribed in § 1.1502-35(j) appeared to preclude the application of the revised § 1.1502-35 to transactions completed prior to September 17, 2008. The final regulations are clarified to provide that the revised rules in § 1.1502-35 (including the ten-year termination of application of § 1.1502-35 described in Background section 2.A. of the preamble) apply after September 16, 2008, to all transactions subject to that section.

# 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 amendment:

# 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 * * *

**Par. 2.**                         Section 1.1502-35 is amended by revising the first sentence of paragraph (j) to read as follows:                    

§ 1.1502-35 

* * * * *

                    (j)                     *Effective/applicability dates.*                     This section applies after September 16, 2008. * * *                

LaNita Van Dyke,

Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel, (Procedure and Administration).

[FR Doc. 2010-4756 Filed 3-4-10; 8:45 am]

BILLING CODE 4830-01-P