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###### Department of the Treasury

###### Internal Revenue Service 

          - 26 CFR Part 1 
          - [TD 9497] 
          - RIN 1545-BI97 

# AGENCY:

Internal Revenue Service (IRS), Treasury. 

# ACTION:

Correcting amendment.

# SUMMARY:

                        This document contains correcting amends to temporary regulations under section 108(i) of the Internal Revenue Code. These regulations primarily affect C corporations regarding the acceleration of deferred discharge of indebtedness (COD) income (deferred COD income) and deferred original issue discount (OID) deductions (deferred OID deductions) under section 108(i)(5)(D), and the calculation of earnings and profits as a result of an election under section 108(i). These errors were made when the agency published temporary regulations (TD 9497) in the                         **Federal Register**                         on Friday, August 13, 2010 (75 FR 49394).                     

# DATES:

This correction is effective on September 14, 2010, and is applicable on August 13, 2010. 

# FOR FURTHER INFORMATION CONTACT:

Concerning the acceleration rules for deferred COD income and deferred OID deductions, and the rules for earnings and profits, Robert M. Rhyne at (202) 622-7790; and concerning the rules for deferred OID deductions, Rubin B. Ranat at (202) 622-7530 (not toll-free numbers). 

# SUPPLEMENTARY INFORMATION:

## Background 

The temporary regulations (TD 9497) that are the subject of this document are under section 108 of the Internal Revenue Code. 

## Need for Correction 

As published, the temporary regulations (TD 9497) contain 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 * * *. 

**Par. 2.**                         Section 1.108(i)-1T is amended by revising the fifth sentence of paragraph (b)(2)(iii)(A) and the fifth sentence of paragraph (b)(2)(iii)(D) to read as follows:                     

§ 1.108(i)-1T 

* * * * *

(b) * * * 

(2) * * * 

(iii) * * * 

(A) * * * For purposes of determining an electing corporation's gross asset value, the amount of any distribution that is not treated as an impairment transaction under paragraph (b)(2)(iii)(D) of this section (distributions and charitable contributions consistent with historical practice) or under paragraph (b)(2)(iii)(E) of this section (special rules for RICs and REITs) is treated as an asset of the electing corporation. * * * 

* * * * *

(D) * * * If an electing corporation has been in existence for less than three years, the period during which the electing corporation has been in existence is substituted for the preceding three taxable years. * * * 

* * * * *

LaNita Van Dyke, 

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

[FR Doc. 2010-22792 Filed 9-13-10; 8:45 am] 

BILLING CODE 4830-01-P