The IRS has issued final regulations that apply to certain nonrecognition transfers of loss property to corporations. The final regulations generally adopt the substantive rules of the proposed regulations (NPRM REG-110405-05), published on October 23, 2006. In addition, the final regulations revise the structure of the proposed rules to clarify the application of Code Sec. 362(e)(2) and to provide a framework that will better coordinate with the provisions of Code Sec. 362(e)(1) and the regulations that are to be promulgated under that section.
These are not substantive changes from the proposed regulations but are solely intended to simplify the application of Code Sec. 362(e)(2) . However, there are material changes and additions to the proposed regulations. The final regulations include revised and expanded examples based on those in the proposed regulations including an example illustrating the application of Code Sec. 362(e)(2) to transactions qualifying as both Code Sec. 351 transactions and reorganizations and the nonapplicability of Code Sec. 362(e)(2) to triangular reorganizations that do not include a transfer to which Code Sec. 362(a) applies.
The final regulations are effective on September 3, 2013, and are applicable to transactions occurring after September 3, 2013, unless effected pursuant to a binding agreement that was in effect prior to that date and at all times thereafter. In addition, taxpayers may apply these regulations to transactions occurring after October 22, 2004. Notice 2005-70, 2005-2 CB 694, is obsoleted.
T.D. 9633, 2013FED ¶47,032
Code Sec. 358
CCH Reference – 2013FED ¶16,552
Code Sec. 362
CCH Reference – 2013FED ¶16,611CE
Code Sec. 705
CCH Reference – 2013FED ¶25,141
Code Sec. 1367
CCH Reference – 2013FED ¶32,100B
Tax Research Consultant
CCH Reference – TRC CCORP: 39,304.10
CCH Reference – TRC REORG: 6,158