Federal Register / Vol. 71, No. 207 / Thursday, October 26, 2006 / Rules and Regulations 62555 

number of small entities under the 

criteria of the Regulatory Flexibility Act. 

List of Subjects in 14 CFR Part 71 

Airspace, Incorporation by reference, 

Navigation (air). 

Adoption of the Amendment 

■ Accordingly, pursuant to the authority 

delegated to me, the Federal Aviation 

Administration amends part 71 of the 

Federal Aviation Regulations (14 CFR 

part 71) as follows: 

PART 71—[AMENDED] 

■ 1. The authority citation for part 71 

continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40103, 40113, 

40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–

1963 Comp., p. 389. 

§ 71.1 [Amended] 

■ 2. The incorporation by reference in 

14 CFR 71.1 of Federal Aviation 

Administration Order 7400.9P, Airspace 

Designations and Reporting Points, 

effective September 16, 2006, is 

amended as follows: 

Paragraph 6005 Class E airspace areas 

extending upward from 700 feet or more 

above the surface of the earth. 

* * * * * 

ANE ME E5 Newton Field, ME [New] 

Jackman, Maine 

(Lat. 45°37′57.9′′ N., long. 70°14′55.6′′ W.) 

That airspace extending upward from 700 

feet above the surface within a 6.0-mile 

radius of Newton Field, Jackman, ME. 

* * * * * 

Issued in College Park, GA, on October 5, 

2006. 

Mark D. Ward, 

Manager, System Support Group, AJO–2E2, 

Eastern Service Center. 

[FR Doc. 06–8846 Filed 10–25–06; 8:45 am] 

BILLING CODE 4910–13–M 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 71 

[Docket No. FAA–2006–24878; Airspace 

Docket NO. 06–AWP–4] 

RIN 2120–AA66 

Revision of Class E Airspace; 

Mountain Home, ID 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: This action revises Class E 

airspace at Mountain Home, ID, 

beginning at 1,200 feet above ground 

level (AGL), replacing the existing Class 

G uncontrolled airspace. This airspace 

action accommodates the terminal 

environment transition between Salt 

Lake Air Route Traffic Control Center 

(ARTCC) and Mountain Home AFB 

Radar Approach Control (RAPCON) by 

placing aircraft in controlled airspace 

during the transfer of aircraft radar 

identification between the facilities. In 

addition, a review of the legal 

description revealed that it does not 

reflect the correct airport reference point 

(ARP) of Mountain Home Municipal 

Airport and geographic position of the 

Sturgeon Non-Directional Beacon 

(NDB). The notice of Proposed 

Rulemaking published in the Federal 

Register on August 21, 2006, included 

an incorrect longitude for Mountain 

Home TACAN. This action corrects 

those minor discrepancies. 

DATES: Effective Date: 0901 UTC, 

January 18, 2007. The Director of the 

Federal Register approves this 

incorporation by reference action under 

title 1, Code of Federal Regulations, part 

51, subject to the annual revision of 

FAA Order 7400.9 and publication of 

conforming amendments. 

FOR FURTHER INFORMATION CONTACT: 

Francie Hope, Western Terminal 

Operations Airspace Specialist, AWP–

520.3, Federal Aviation Administration, 

15000 Aviation Boulevard, Lawndale, 

California 90261, telephone (310) 725–

6502. 

SUPPLEMENTARY INFORMATION: 

History 

On August 21, 2006, the FAA 

published in Federal Register a notice 

of proposed rulemaking to revise the 

Class E airspace at Mountain Home, ID, 

replacing Class G uncontrolled airspace 

with Class E airspace. Interested parties 

were invited to participate in this 

rulemaking effort by submitting written 

comments on this proposal to the FAA. 

No comments were received. With the 

exception of an editorial change to the 

Mountain Home TACAN longitude, this 

revision is the same as that proposed in 

the notice. 

The Rule 

This action amends Title 14 Code of 

Federal Regulations (14 CFR) part 71 by 

revising the Class E airspace area with 

a base altitude of 1,200 feet AGL in the 

vicinity of Mountain Home AFB, ID. 

Class E airspace is used to transition to 

and from the terminal or enroute 

environment, allowing a buffer for 

arriving and departing IFR aircraft from 

uncontrolled airspace. The FAA is 

taking this action to enhance the safe 

and efficient use of the navigable 

airspace in southern Idaho. The FAA has determined that this 

regulation only involves an established 

body of technical regulations for which 

frequent and routine amendments are 

necessary to keep them operationally 

current. Therefore, this regulation : (1) 

Is not a ‘‘significant regulatory action’’

under Executive Order 12866; (2) is not 

a ‘‘significant rule’’ under Department of 

Transportation Regulatory Policies and 

procedures (44 FR 11034; February 26, 

1979); and (3) does not warrant 

preparation of a regulatory evaluation as 

the anticipated impact is so minimal. 

Since this is a routine matter that will 

only affect air traffic procedures and air 

navigation, it is certified that this rule, 

when promulgated, will not have a 

significant economic impact on a 

substantial number of small entities 

under the criteria of the Regulatory 

Flexibility Act. 

List of Subjects in 14 CFR Part 71 

Airspace, Incorporation by reference, 

Navigation (air). 

Adoption of the Amendment 

■ In consideration of the foregoing, the 

Federal Aviation Administration 

amends 14 CFR part 71 as follows: 

PART 71—DESIGNATION OF CLASS A, 

B, C, D, AND E AIRSPACE AREAS; AIR 

TRAFFIC SERVICE ROUTES; AND 

REPORTING POINTS 

■ 1. The authority citation for 14 CFR 

part 71 continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40103, 40113, 

40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–

1963 Comp., p. 389. 

§ 71.1 [Amended] 

■ 2. The incorporation by reference in 

14 CFR 71.1 of the Federal Aviation 

Administration Order 7400.9P, Airspace 

Designations and Reporting Points, 

dated September 1, 2006, and effective 

September 15, 2006, is amended as 

follows: 

Paragraph 6005 Class E airspace areas 

extending upward from 700 feet or more 

above the surface of the earth. 

* * * * * 

ANM ID E5 Mountain Home, ID [Revised] 

Mountain Home, AFB, ID 

(Lat. 43°02′37′′ N., long. 115°52′21′′ W.) 

Mountain Home TACAN 

(Lat. 43°02′26′′ N., long. 115°52′29′′ W.) 

Mountain Home Municipal Airport 

(Lat. 43°07′53′′ N., long. 115°43′47′′ W.) 

Sturgeon NDB 

(Lat. 43°06′48′′ N., long. 115°39′31′′ W.) 

That airspace extending upward from 700 

feet above the surface within 8.7 miles 

northeast and 7.9 miles southwest of the 

Mountain Home AFB Tacan 135° and 315° 

radials extending from 15.7 miles southeast 


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62556 Federal Register / Vol. 71, No. 207 / Thursday, October 26, 2006 / Rules and Regulations 

to 15.7 miles northwest of the TACAN, and 

within a 7.4-mile radius of the Mountain 

Home Municipal Airport, thence extending 

east of the radius 3.1 miles each side of the 

Sturgeon NDB 112° bearing to 7.4 miles east 

of Sturgeon NDB; that airspace extending 

upward from 1,200 feet above the surface 

bounded on the northeast by the southwest 

edge of V–253; to long. 115°00′11′′W; south 

to lat. 42°24′00′′ N; east to lat. 42°24′08′′N, 

long. 115°18′09′′ W; thence on southeast, 

south, and west by a 46.0-mile radius of 

Mountain Home AFB; on the west by the 

southeast edge of V–113; northeast to the 

southwest edge of V–253. 

* * * * * 

Issued in Los Angeles, California, on 

October 10, 2006. 

Leonard A. Mobley, 

Acting Area Director, Western Terminal 

Operations. 

[FR Doc. 06–8850 Filed 10–25–06; 8:45 am] 

BILLING CODE 4910–13–M 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[TD 9244] 

RIN 1545–BC05; 1545–BE88 

Determination of Basis of Stock or 

Securities Received in Exchange for, 

or With Respect to, Stock or Securities 

in Certain Transactions; Treatment of 

Excess Loss Accounts; Correction 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Correcting amendment. 

SUMMARY: This document contains a 

correction to final and temporary 

regulations (TD 9244), that were 

published in the Federal Register on 

Thursday, January 26, 2006 (71 FR 

4264). This regulation provides 

guidance regarding the determination of 

the basis of stock or securities received 

in exchange for, or with respect to, stock 

or securities in certain transactions. 

DATES: This correction is effective 

January 23, 2006. 

FOR FURTHER INFORMATION CONTACT: 

Theresa M. Kolish, (202) 622–7530 (not 

a toll-free number). 

SUPPLEMENTARY INFORMATION: 

Background 

The final and temporary regulations 

(TD 9244) that are the subject of these 

corrections are under sections 358 and 

1502 of the Internal Revenue Code. 

Need for Correction 

As published, TD 9244 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 

■ Paragraph 1. The authority citation 

for part 1 continues to read in part as 

follows: 

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

§ 1.358–1 [Corrected] 

■ Par. 2. Section 1.358–1 is amended by 

revising paragraph (b), Example to read 

as follows: 

§ 1.358–1 Basis to distributees. 

* * * * * 

(b) * * * 

Example. A purchased a share of stock in 

Corporation X in 1935 for $150. Since that 

date A has received distributions out of other 

than earnings and profits (as defined in 

section 316) totaling $60, so that A’s adjusted 

basis for the stock is $90. In a transaction 

qualifying under section 356, A exchanged 

this share for one share in Corporation Y, 

worth $100, cash in the amount of $10, and 

other property with a fair market value of 

$30. The exchange had the effect of the 

distribution of a dividend. A’s ratable share 

of the earnings and profits of Corporation X 

accumulated after February 28, 1913, was $5. 

A realized a gain of $50 on the exchange, but 

the amount recognized is limited to $40, the 

sum of the cash received and the fair market 

value of the other property. Of the gain 

recognized, $5 is taxable as a dividend, and 

$35 is taxable as a gain from the exchange of 

property. The basis to A of the one share of 

stock of Corporation Y is $90, that is, the 

adjusted basis of the one share of stock of 

Corporation X ($90), decreased by the sum of 

the cash received ($10) and the fair market 

value of the other property received ($30) 

and increased by the sum of the amount 

treated as a dividend ($5) and the amount 

treated as a gain from the exchange of 

property ($35). The basis of the other 

property received is $30. 

* * * * * 

§ 1.358–2 [Corrected] 

■ Par. 3. Section 1.358–2(c) is amended 

by revising paragraphs (ii) in Examples 

4, 5, 6 and 11 to read as follows: 

§ 1.358–2 Allocation of basis among 

nonrecognition property. 

(a) * * * 

(2) * * * 

(viii) * * * 

(c) * * * 

Example 4. (i) * * * 

(ii) Analysis. Under paragraph (a)(2)(ii) of 

this section and under § 1.356–1(b), because 

the terms of the exchange do not specify that 

shares of Corporation Y stock or cash are 

received in exchange for particular shares of 

Class A stock or Class B stock of Corporation 

X, a pro rata portion of the shares of 

Corporation Y stock and cash received will 

be treated as received in exchange for each 

share of Class A stock and Class B stock of 

Corporation X surrendered based on the fair 

market value of such stock. Therefore, J is 

treated as receiving one share of Corporation 

Y stock and $5 of cash in exchange for each 

share of Class A stock of Corporation X and 

one share of Corporation Y stock and $5 of 

cash in exchange for each share of Class B 

stock of Corporation X. J realizes a gain of 

$140 on the exchange of shares of Class A 

stock of Corporation X, $100 of which is 

recognized under § 1.356–1(a). J realizes a 

gain of $80 on the exchange of Class B stock 

of Corporation X, all of which is recognized 

under § 1.356–1(a). Under paragraph (a)(2)(i) 

of this section, J has 10 shares of Corporation 

Y stock, each of which has a basis of $2 and 

is treated as having been acquired on Date 1, 

10 shares of Corporation Y stock, each of 

which has a basis of $4 and is treated as 

having been acquired on Date 2, and 20 

shares of Corporation Y stock, each of which 

has a basis of $5 and is treated as having been 

acquired on Date 3. Under paragraph 

(a)(2)(vii) of this section, on or before the date 

on which the basis of a share of Corporation 

Y stock received becomes relevant, J may 

designate which of the shares of Corporation 

Y stock received have a basis of $2, which 

have a basis of $4, and which have a basis 

of $5. 

Example 5. (i) * * * 

(ii) Analysis. Under paragraph (a)(2)(ii) of 

this section and under § 1.356–1(b), because 

the terms of the exchange specify that J 

receives 40 shares of stock of Corporation Y 

in exchange for J’s shares of Class A stock of 

Corporation X and $200 of cash in exchange 

for J’s shares of Class B stock of Corporation 

X and such terms are economically 

reasonable, such terms control. J realizes a 

gain of $140 on the exchange of shares of 

Class A stock of Corporation X, none of 

which is recognized under § 1.356–1(a). J 

realizes a gain of $80 on the exchange of 

shares of Class B stock of Corporation X, all 

of which is recognized under § 1.356–1(a). 

Under paragraph (a)(2)(i) of this section, J has 

20 shares of Corporation Y stock, each of 

which has a basis of $1 and is treated as 

having been acquired on Date 1, and 20 

shares of Corporation Y stock, each of which 

has a basis of $2 and is treated as having been 

acquired on Date 2. Under paragraph 

(a)(2)(vii) of this section, on or before the date 

on which the basis of a share of Corporation 

Y stock received becomes relevant, J may 

designate which of the shares of Corporation 

Y stock received have a basis of $1 and 

which have a basis of $2. 

Example 6. (i) * * * 

(ii) Analysis. Under paragraph (a)(2)(ii) of 

this section and under § 1.354–1(a), because 

the terms of the exchange specify that J 

receives 10 shares of stock of Corporation Y 


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