Federal Register / Vol. 74, No. 42 / Thursday, March 5, 2009 / Proposed Rules 9575 

example, name, address, etc.) 

voluntarily submitted by the commenter 

may be publicly accessible. Do not 

submit confidential business 

information or otherwise sensitive or 

protected information. NOAA will 

accept anonymous comments (enter 

N/A in the required fields if you wish 

to remain anonymous). Attachments to 

electronic comments will be accepted in 

Microsoft Word, Excel, Wordperfect, or 

Adobe PDF file formats only. 

FOR FURTHER INFORMATION CONTACT: 

David A. Score, Superintendent, Florida 

Keys National Marine Sanctuary, 33 

East Quay Road, Key West, FL 33040. 

SUPPLEMENTARY INFORMATION: 

Need for Correction 

In the preamble of the proposed rule, 

NOAA incorrectly stated that the U.S. 

Coast Guard regulation Rule 27e 

specified a minimum distance of 100 

yards between vessels and ‘‘divers 

down’’ flags. In fact, only the applicable 

Florida Statute specifies the 100-yard 

minimum distance requirement (Section 

327.331 FS). In order to be consistent 

with the regulations issued by the State 

of Florida and consistent in both state 

and federal waters of the sanctuary, 

NOAA proposes to change our 

regulations from ‘‘100 feet’’ in 922.163 

(a)(5)(iii)(C) to ‘‘100 yards.’’ Requiring a 

uniform minimum distance in both state 

and federal waters simplifies the 

sanctuary regulations, and therefore 

improves compliance for sanctuary 

users and enforcement of a single 

regulation. The regulation allows both 

diving and vessel operations to occur in 

relatively the same area without 

conflict. A consistent regulation also 

allows for better public education 

programs. NOAA is preparing an 

environmental assessment pursuant to 

the National Environmental Policy Act 

to analyze the impacts associated with 

this modification to the Florida Keys 

National Marine Sanctuary regulations. 

Request for Comments 

NOAA reopens the public comment 

period on the proposed rule to make 

technical corrections and amendments 

to the FKNMS regulations. 

Daniel J. Basta, 

Director, Office of National Marine 

Sanctuaries. 

[FR Doc. E9–4569 Filed 3–4–09; 8:45 am] 

BILLING CODE 3510–22–M 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–143686–07] 

RIN 1545–BH35 

The Allocation of Consideration and 

Allocation and Recovery of Basis in 

Transactions Involving Corporate 

Stock or Securities; Correction 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Correction to notice of proposed 

rulemaking. 

SUMMARY: This document contains a 

correction to a notice of proposed 

rulemaking (REG–143686–07) that was 

published in the Federal Register on 

Wednesday, January 21, 2009 (74 FR 

3509) providing guidance regarding the 

recovery of stock basis in distributions 

under section 301 and transactions that 

are treated as dividends to which 

section 301 applies, as well as guidance 

regarding the determination of gain and 

the basis of stock or securities received 

in exchange for, or with respect to, stock 

or securities in certain transactions. The 

proposed regulations affect shareholders 

and security holders of corporations. 

These proposed regulations are 

necessary to provide such shareholders 

and security holders with guidance 

regarding the allocation and recovery of 

basis on distributions of property. 

FOR FURTHER INFORMATION CONTACT: 

Concerning the proposed regulations 

under sections 301, 302, and 304, 

Theresa Kolish, (202) 622–7530; 

concerning the proposed regulations 

under sections 351, 354, 355, 356, 358, 

368, 1001, and 1016, Rebecca O. Burch, 

(202) 622–7550; concerning the 

proposed regulations under section 861, 

Jeffrey L. Parry, (202) 622–4476 (not 

toll-free numbers). 

SUPPLEMENTARY INFORMATION: 

Background 

The correction notice that is the 

subject of this document is under 

sections 301, 302, 304, 351, 354, 355, 

356, 358, 368, 861, 1001, 1016, and 1374 

of the Internal Revenue Code. 

Need for Correction 

As published, the notice of proposed 

rulemaking (REG–143686–07) contains 

errors that may prove to be misleading 

and are in need of clarification. 

Correction of Publication 

Accordingly, the publication of the 

notice of proposed rulemaking (REG– 

143686–07), which was the subject of 

FR Doc. E9–1100, is corrected as 

follows: 

1. On page 3509, column 2, in the 

preamble, under the caption SUMMARY, 

line 3, the language ‘‘301, 302, 304, 351, 

354, 356, 358, 368,’’ is corrected to read 

‘‘301, 302, 304, 351, 354, 355, 356, 358, 

368,’’. 

2. On page 3509, column 3, in the 

preamble, under the caption FOR

FURTHER INFORMATION CONTACT, line 5, 

the language ‘‘under sections 351, 354, 

356, 358, 368,’’ is corrected to read 

‘‘under sections 351, 354, 355, 356, 358, 

368,’’. 

3. On page 3510, column 1, in the 

preamble, under the paragraph heading 

‘‘Explanation of Provisions’’, second 

paragraph, line 6, the language ‘‘lead to 

the possibility of variant’’ is corrected to 

read ‘‘led to the possibility of variant’’. 

4. On page 3510, column 1, in the 

preamble, under the paragraph heading 

‘‘Explanation of Provisions’’, second 

paragraph, line 5 from the bottom of the 

paragraph, the language ‘‘was needed 

reconsidered. See REG–’’ is corrected to 

read ‘‘needed reconsideration. See 

REG–’’. 

5. On page 3510, column 2, in the 

preamble, under the paragraph heading 

‘‘Explanation of Provisions’’, second 

paragraph of the column, line 2, the 

language ‘‘that a share of stock is the 

basic unit of’’ is corrected to read ‘‘that 

a share of stock is a basic unit of’’. 

6. On page 3511, column 2, in the 

preamble, under the paragraph heading 

‘‘C. Dividend Equivalent Reorganization 

Exchanges’’, first paragraph of the 

column, line 7 from the bottom of the 

paragraph, the language ‘‘of stock solely 

for nonqualifying’’ is corrected to read 

‘‘of stock solely for qualifying’’. 

§ 1.301–2 [Corrected] 

7. On page 3513, column 3, § 1.301– 

2(a) Example.(i), last line of the column, 

the language ‘‘$25 (Block 1) and 75 were 

acquired on Date’’ is corrected to read 

‘‘$25 (block 1) and 75 were acquired on 

Date’’. 

8. On page 3514, column 1, § 1.301– 

2(a) Example.(i), first line of the column, 

the language ‘‘2 for $175 (Block 2). On 

December 31, when’’ is corrected to read 

‘‘2 for $175 (block 2). On December 31, 

when’’. 

§ 1.302–5 [Corrected] 

9. On page 3514, column 1, § 1.302– 

5(a)(3)(i), line 4 from the bottom of the 

column, the language ‘‘treated as loss. If 

all the shares of the’’ is corrected to read 

‘‘treated as a loss. If all the shares of 

the’’. 

10. On page 3515, column 1, § 1.302– 

5(e) Example 2.(ii), last line, the 


dwashington3 on PROD1PC60 with PROPOSALS
9576 Federal Register / Vol. 74, No. 42 / Thursday, March 5, 2009 / Proposed Rules 

language ‘‘5(a)(3)(ii)).’’ is corrected to 

read ‘‘5(a)(4)).’’. 

11. On page 3515, column 1, § 1.302– 

5(e) Example 3.(ii), line 2 from the 

bottom of the column, the language 

‘‘shares of common stock. Therefore, the 

only’’ is corrected to read ‘‘shares of 

preferred stock. Therefore, the only’’. 

12. On page 3515, column 2, § 1.302– 

5(e) Example 4.(i), last line, the language 

‘‘stock of Y.’’ is corrected to read ‘‘stock 

of Corporation Y.’’. 

13. On page 3515, column 2, § 1.302– 

5(e) Example 4.(ii), line 4, the language 

‘‘deferred loss on a disposition of the’’ 

is corrected to read ‘‘deferred loss on the 

disposition of the’’. 

§ 1.304–2 [Corrected] 

14. On page 3515, column 3, § 1.304– 

2(a), the language ‘‘In general’’ is 

corrected to read ‘‘In general—’’. 

15. On page 3515, column 3, § 1.304– 

2(a)(1), lines 1 through 3 from the 

bottom of the paragraph, the language 

‘‘302(a) or 303 does not apply. For the 

amount constituting a dividend in such 

cases, see § 1.304–6.’’ is corrected to 

read ‘‘302(a) or 303 does not apply.’’. 

16. On page 3515, column 3, § 1.304– 

2(a)(3), line 2 from the bottom of the 

paragraph, the language ‘‘transferors 

basis in the stock of the’’ is corrected to 

read ‘‘transferor’s basis in the stock of 

the’’. 

17. On page 3516, column 1, § 1.304– 

2(c), line 2, the language ‘‘examples in 

this section, each of’’ is corrected to 

read ‘‘examples in this section, each’’. 

18. On page 3516, column 2, § 1.304– 

2(c) Example 3.(i), line 4, the language 

‘‘common) and then acquired all of the’’ 

is corrected to read ‘‘common stock) and 

then acquired all of the’’. 

19. On page 3516, column 3, § 1.304– 

2(c) Example 3.(i), first line of the 

column, the language ‘‘common stock 

for $100). Only corporation Y’’ is 

corrected to read ‘‘common stock for 

$100). Only Corporation Y’’. 

20. On page 3516, column 3, § 1.304– 

2(c) Example 3.(ii), lines 4 through 11 

from the bottom of the paragraph, the 

language ‘‘other 2 blocks of corporation 

Y shares. After the redemption 

transaction, all of Corporation W’s 

shares in corporation Y, including the 

deemed shares that are redeemed, are 

treated as exchanged in a 

recapitalization described in 

section368(a)(1)(E). As a result, 

corporation W will have 100 shares in 

corporation Y, 50 shares’’ is corrected to 

read ‘‘other 2 blocks of Corporation Y 

shares. After the redemption 

transaction, all of Corporation W’s 

shares in Corporation Y, including the 

deemed shares that are redeemed, are 

treated as exchanged in a 

recapitalization described in section 

368(a)(1)(E). As a result, Corporation W 

will have 100 shares in Corporation Y, 

50 shares’’. 

§ 1.351–2 [Corrected] 

21. On page 3517, column 2, § 1.351– 

2(b) Example., line 11, the language ‘‘to 

C. Gain, but not loss, is recognized by 

D.’’ is corrected to read ‘‘by C. Gain, but 

not loss, is recognized by D.’’. 

22. On page 3517, column 2, § 1.351– 

2(b) Example., line 9 from the bottom of 

the paragraph, the language ‘‘of $100 (B) 

$30 cash and 30 shares of stock’’ is 

corrected to read ‘‘of $100); (B) $30 cash 

and 30 shares of stock’’. 

§ 1.355–1 [Corrected] 

23. On page 3518, column 2, § 1.355– 

1(e)(2), line 13, the language ‘‘section 

356 or both sections 355 and 356’’ is 

corrected to read ‘‘section 356, or both 

sections 355 and 356’’. 

§ 1.356–1 [Corrected] 

24. On page 3518, column 3, § 1.356– 

1(d) Example 3.(i), lines 3 through 7, the 

language ‘‘on Date 1 for $3 each (Block 

1) and 10 shares of stock of Corporation 

X on Date 2 for $9 each (Block 2). On 

Date 3, Corporation Y acquires the 

assets of Corporation X in a 

reorganization under section 

368(a)(1)(A).’’ is corrected to read ‘‘on 

Date 1 for $3 each (block 1) and 10 

shares of stock of Corporation X on Date 

2 for $9 each (block 2). On Date 3, 

Corporation Y acquires the assets of 

Corporation X in a reorganization 

described in section368(a)(1)(A).’’. 

25. On page 3518, column 3, § 1.356– 

1(d) Example 3.(ii), lines 14 through 18, 

the language ‘‘exchange of the Block 1 

shares of Corporation X stock, $50 of 

which is recognized under section 356 

and paragraph (a) of this section, and J 

realizes a gain of $10 on the exchange 

of the Block 2 shares of Corporation X 

stock,’’ is corrected to read ‘‘exchange of 

the block 1 shares of Corporation X 

stock, $50 of which is recognized under 

section 356 and paragraph (a) of this 

section, and J realizes a gain of $10 on 

the exchange of the block 2 shares of 

Corporation X stock,’’. 

26. On page 3518, column 3, § 1.356– 

1(d) Example 4.(i), lines 5 through 7, the 

language ‘‘exchange for J’s Block 1 

shares of stock of Corporation X and 

$100 of cash in exchange for J’s Block 

2 shares of stock of corporation X.’’ is 

corrected to read ‘‘ exchange for J’s 

block 1 shares of stock of Corporation X 

and $100 of cash in exchange for J’s 

block 2 shares of stock of Corporation 

X.’’. 

27. On page 3518, column 3, § 1.356– 

1(d) Example 4.(ii), lines 4 through 12, 

the language ‘‘Corporation Y in 

exchange for J’s Block 1 shares of stock 

of Corporation X and $100 of cash in 

exchange for J’s Block 2 shares of stock 

of Corporation X and such terms are 

economically reasonable, such terms 

control. J realizes a gain of $70 on the 

exchange of the Block 1 shares of stock, 

none of which is recognized under 

section 354. J realizes a gain of $10 on 

the exchange of the Block 2’’ is 

corrected to read ‘‘Corporation Y in 

exchange for J’s block 1 shares of stock 

of Corporation X and $100 of cash in 

exchange for J’s block 2 shares of stock 

of Corporation X and such terms are 

economically reasonable, such terms 

control. J realizes a gain of $70 on the 

exchange of the block 1 shares of stock, 

none of which is recognized under 

section 354. J realizes a gain of $10 on 

the exchange of the block 2’’. 

§ 1.358–1 [Corrected] 

28. On page 3519, column 2, § 1.358– 

1(d) Example., line 11, the language 

‘‘the distribution of a dividend. A’s 

ratable’’ is corrected to read ‘‘a 

distribution of a dividend. A’s ratable’’. 

§ 1.358–2 [Corrected] 

29. On page 3519, column 3, § 1.358– 

2(a)(1), line 4, the language 

‘‘distribution to which section 354, 355’’ 

is corrected to read ‘‘distribution to 

which section 354, 355,’’. 

30. On page 3519, column 3, § 1.358– 

2(b), line 6, the language ‘‘section 354, 

355 or 356, the following’’ is corrected 

to read ‘‘section 354, 355, or 356, the 

following’’. 

31. On page 3521, column 3, § 1.358– 

2(g)(2), line 4, the language ‘‘section 351 

applies stock or stock and’’ is corrected 

to read ‘‘section 351 applies, stock or 

stock and’’. 

32. On page 3522, column 1, § 1.358– 

2(i) Example 1.(i), line 6, the language 

‘‘of Corporation X in a reorganization 

under’’ is corrected to read ‘‘of 

Corporation X in a reorganization 

described in’’. 

33. On page 3522, column 1, § 1.358– 

2(i) Example 1.(ii), line 2 from the 

bottom of the paragraph, the language 

‘‘of corporation Y stock have a basis of 

$1.50’’ is corrected to read ‘‘of 

Corporation Y stock have a basis of 

$1.50’’. 

34. On page 3522, column 1, § 1.358– 

2(i) Example 2.(i), line 5 from the 

bottom of the column, the language 

‘‘shares of corporation Y stock. Again, J 

is not’’ is corrected to read ‘‘shares of 

Corporation Y stock. Again, J is not’’. 

35. On page 3522, column 2, § 1.358– 

2(i) Example 3.(i), line 10, the language 

‘‘a reorganization under section 

368(a)(1)(E).’’ is corrected to read ‘‘a 


dwashington3 on PROD1PC60 with PROPOSALS
Federal Register / Vol. 74, No. 42 / Thursday, March 5, 2009 / Proposed Rules 9577 

reorganization described in section 

368(a)(1)(E).’’. 

36. On page 3522, column 3, § 1.358– 

2(i) Example 5.(ii), line 10, the language 

‘‘is not dividend equivalent, such 

terms’’ is corrected to read ‘‘does not 

have the effect of a dividend, such 

terms’’. 

37. On page 3523, column 1, § 1.358– 

2(i) Example 6.(i), line 8, the language 

‘‘reorganization under section 

368(a)(1)(A).’’ is corrected to read 

‘‘reorganization described in section 

368(a)(1)(A).’’. 

38. On page 3523, column 1, § 1.358– 

2(i) Example 7.(i), line 6, the language 

‘‘of Corporation X in a reorganization 

under’’ is corrected to read ‘‘of 

Corporation X in a reorganization 

described in’’. 

39. On page 3523, column 2, § 1.358– 

2(i) Example 8.(ii), line 5, the language 

‘‘liability of J, the rules of paragraph (g) 

this’’ is corrected to read ‘‘liability of J, 

the rules of paragraph (g) of this’’. 

40. On page 3523, column 2, § 1.358– 

2(i) Example 9.(i), lines 9 through 11, 

the language ‘‘Corporation X in a 

reorganization under section 

368(a)(1)(D). Pursuant to the terms of 

the plan of reorganization, J surrenders 

J’s’’ is corrected to read ‘‘Corporation X 

in a reorganization described in section 

368(a)(1)(D). Pursuant to the terms of 

the plan of reorganization, J 

surrenders’’. 

41. On page 3523, column 2, § 1.358– 

2(i) Example 9.(ii), line 5 from the 

bottom of the column, the language 

‘‘recapitalized in a reorganization 

under’’ is corrected to read 

‘‘recapitalized in a reorganization 

described in’’. 

42. On page 3523, column 3, § 1.358– 

2(i) Example 10.(i), lines 12 thru 14, the 

language ‘‘Corporation X in a 

reorganization under section 

368(a)(1)(D). Pursuant to the terms of 

the plan of reorganization, J surrenders 

J’s’’ is corrected to read ‘‘Corporation X 

in a reorganization described in section 

368(a)(1)(D). Pursuant to the terms of 

the plan of reorganization, J 

surrenders’’. 

43. On page 3523, column 3, § 1.358– 

2(i) Example 10.(ii), line 10 from the 

bottom of the column, the language ‘‘be 

recapitalized in a reorganization under’’ 

is corrected to read ‘‘be recapitalized in 

a reorganization described in’’. 

44. On page 3524, column 2, § 1.358– 

2(i) Example 13.(i), line 9, the language 

‘‘reorganization under section 

368(a)(1)(A).’’ is corrected to read 

‘‘reorganization described in section 

368(a)(1)(A).’’. 

45. On page 3524, column 3, § 1.358– 

2(i) Example 14.(i), line 9, the language 

‘‘reorganization under section 

368(a)(1)(A),’’ is corrected to read 

‘‘reorganization described in section 

368(a)(1)(A),’’. 

46. On page 3525, column 1, § 1.358– 

2(i) Example 15.(ii), line 3 from the 

bottom of the paragraph, the language 

‘‘each has a basis of $6 and is treated as 

having’’ is corrected to read ‘‘each has 

a basis of $5 and is treated as having’’. 

47. On page 3525, column 1, § 1.358– 

2(i) Example 16.(i), line 4, the language 

‘‘Shares of Corporation Y in an 

exchange to’’ is corrected to read 

‘‘Shares of Corporation Y stock in an 

exchange to’’. 

48. On page 3525, column 1, § 1.358– 

2(i) Example 17.(i), line 2, the language 

‘‘Facts. The facts are the same as 

Example 1,’’ is corrected to read ‘‘Facts. 

The facts are the same as Example 16,’’. 

§ 1.358–6 [Corrected] 

49. On page 3525, column 2, § 1.358– 

6(f)(3), line 4 from the bottom of the 

paragraph, the language ‘‘1 revised April 

1, 2008 for the year’’ is corrected to read 

‘‘1 revised April 1 for the year’’. 

§ 1.861–12 [Corrected] 

50. On page 3525, column 3, § 1.861– 

12(c)(2)(vi), lines 1 through 3, the 

language ‘‘Adjustments in respect of 

redeemed stock for taxpayers using the 

tax book value method. Solely for’’ is 

corrected to read ‘‘Adjustments in 

respect of redeemed stock for taxpayers 

using the tax book value method. Solely 

for’’. 

51. On page 3525, column 3, § 1.861– 

12(c)(2)(vi), lines 13 through 15, the 

language ‘‘taken into account under 

§ 1.302–5(a)(3) as of the close of the 

redeemed shareholder’s taxable year 

(unrecovered’’ is corrected to read 

‘‘taken into account under § 1.302–5 as 

of the close of the redeemed 

shareholder’s taxable year (deferred’’. 

52. On page 3525, column 3, § 1.861– 

12(c)(2)(vi), line 4 from the bottom of 

the column, the language ‘‘unrecovered 

loss (and allocated among’’ is corrected 

to read ‘‘deferred loss (and allocated 

among’’. 

§ 1.1001–6 [Corrected] 

53. On page 3526, column 2, 

§ 1.1001–6(c), line 10 from the top of the 

column, the language ‘‘still 

unliquidated. Solely for purposes of’’ is 

corrected to read ‘‘still unliquidated 

investment. Solely for purposes of’’. 

LaNita Van Dyke, 

Chief, Publications and Regulations Branch, 

Legal Processing Division, Associate Chief 

Counsel, (Procedure and Administration). 

[FR Doc. E9–4657 Filed 3–4–09; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–144615–02] 

RIN 1545–BI47 

Section 482: Methods To Determine 

Taxable Income in Connection With a 

Cost Sharing Arrangement; Correction 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Correction to notice of proposed 

rulemaking by cross-reference to 

temporary regulations. 

SUMMARY: This document contains 

corrections to a notice of proposed 

rulemaking by cross-reference to 

temporary regulations (REG–144615–02) 

that was published in the Federal 

Register on Monday, January 5, 2009 

providing further guidance and 

clarification regarding methods under 

section 482 to determine taxable income 

in connection with a cost sharing 

arrangement in order to address issues 

that have arisen in administering the 

current regulations. These temporary 

regulations potentially affect controlled 

taxpayers within the meaning of section 

482 that enter into cost sharing 

arrangements as defined therein. 

FOR FURTHER INFORMATION CONTACT: 

Kenneth P. Christman, (202) 435–5265 

(not a toll-free number). 

SUPPLEMENTARY INFORMATION: 

Background 

The correction notice that is the 

subject of this document is under 

section 482 of the Internal Revenue 

Code. 

Need for Correction 

As published, the notice of proposed 

rulemaking by cross-reference to 

temporary regulations (REG–144615–02) 

published January 5, 2009 (74 FR 236), 

contains errors that may prove to be 

misleading and are in need of 

clarification. 

Correction of Publication 

Accordingly, the publication of the 

notice of proposed rulemaking by crossreference to temporary regulations 

(REG–144615–02), which was the 

subject of FR Doc. E8–30712, is 

corrected as follows: 

1. On page 236, in the document 

headings, under the caption ACTION:, the 

language ‘‘Notice of proposed 

rulemaking by cross-reference to 

temporary regulations, notice of 

proposed rulemaking, and notice of 


dwashington3 on PROD1PC60 with PROPOSALS