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CFR Citation: 26 CFR Part 1

RIN ID: RIN 1545-BD70

TD ID: [TD 9398]

NOTICE: RULES

DOCUMENT ACTION: Correcting amendments.

SUBJECT CATEGORY: Partner's Distributive Share; Correction

DATES: This correction is effective June 12, 2008, and is applicable on May 19, 2008.

DOCUMENT SUMMARY: This document contains corrections to final regulations (TD 9398) that were published in the Federal Register on Monday, May 19, 2008 (73 FR 28699) providing rules for testing whether the economic effect of an allocation is substantial within the meaning of section 704(b) where partners are lookthrough entities or members of a consolidated group. The final regulations clarify the application of section 704(b) to partnerships the interests of which are owned by lookthrough entities and members of consolidated groups and, through an example, reiterate the effect of other provisions of the Internal Revenue Code on partnership allocations.

SUMMARY: Partner's Distributive Share; Correction,

SUPPLEMENTAL INFORMATION

The final regulations that are the subject of this document are under section 704 of the Internal Revenue Code.

Need for Correction

As published, final regulations (TD 9398) 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 1INCOME 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 1.7041 is amended as follows:

1. In paragraph (b)(2)(iii)(d)(3), the last sentence, the language ``In the case of a controlled foreign corporation that is a look through entity, the tax attributes to be taken into account are those of any person that is a United States shareholder (as defined in paragraph (b)(2)(iii)(d)(5) of this section) of the controlled foreign corporation, or, if the United States shareholder is a lookthrough entity, a United States person that owns an interest in such shareholder directly or indirectly through one or more lookthrough entities.'' is removed and the language ``In the case of a controlled foreign corporation that is a lookthrough entity, the tax attributes to be taken into account are those of any person that is a United States shareholder (as defined
[[Page 33302]]
in paragraph (b)(2)(iii)(d)(5) of this section) of the controlled foreign corporation, or, if the United States shareholder is a look through entity, a United States person that owns an interest in such shareholder directly or indirectly through one or more lookthrough entities.'' is added in its place.

2. In paragraph (b)(5) Example 29., the fourth sentence, the language ``C is a partnership with two partners, E, an individual, and F, a corporation that is member of a consolidated group within the meaning of Sec. 1.15021(h).'' is removed and the language ``C is a partnership with two partners, E, an individual, and F, a corporation that is a member of a consolidated group within the meaning of Sec. 1.15021(h).'' is added in its place.
LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel, (Procedure and Administration).
[FR Doc. E813247 Filed 61108; 8:45 am]
BILLING CODE 483001P

FOR FURTHER INFORMATION CONTACT Jonathan E. Cornwell and Kevin I. Babitz at (202) 6223050 (not a tollfree number).