TD 9353 - correction

Federal Register, Volume 72 Issue 195 (Wednesday, October 10, 2007)

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[Federal Register Volume 72, Number 195 (Wednesday, October 10, 2007)]
[Rules and Regulations]
[Page 57487]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-19869]

[[Page 57487]]
=======================================================================
----------------------------------------------------------------------DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9353]
RIN 1545-BC67
Section 1045 Application to Partnerships; Correction
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Correcting amendments.
----------------------------------------------------------------------SUMMARY: This document contains corrections to final regulations (TD
9353) that were published in the Federal Register on Tuesday, August
14, 2007 (72 FR 45346) relating to the application of section 1045 of
the Internal Revenue Code to partnerships and their partners.
DATES: This correction is effective October 10, 2007.
FOR FURTHER INFORMATION CONTACT: Jian H. Grant at (202) 622-3050 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are the subject of this correction are
under section 1045 of the Internal Revenue Code.
Need for Correction
As published, final regulations (TD 9353) 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

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0
Accordingly, 26 CFR part 1 is corrected by making the following
amendments:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 continues to read, in
part, as follows:
Authority: 26 U.S.C. 7805 * * *
0
Par. 2. Section 1.1045-1 is amended by revising the last sentence of
paragraph (c)(1)(i), the subtitle of paragraph (c)(2)(i), the first
five sentences of paragraph (h)(3)(i) Example 3.(i), the fourth
sentence of (h)(3)(i) Example 5.(v), and the first sentence of
(h)(3)(i) Example 12.(ii) to read as follows:
Sec.

1.1045-1

Application to partnerships.

* * * * *
(c) * * *
(1) * * *
(i) * * * A taxpayer other than a C corporation that sells QSB
stock held for more than 6 months at the time of the sale may elect in
accordance with paragraph (h) of this section to apply section 1045 if
replacement QSB stock is purchased by a purchasing partnership
(including a selling partnership).
* * * * *
(2) * * *
(i) General rule.
* * * * *
(h) * * *
(3) * * *
(i) * * *
Example 3. * * *
(i) On January 1, 2008, A, an individual, and B, an individual,
each contribute $500 to UTP (upper-tier partnership) for equal
partnership interests. On February 1, 2008, UTP and C, an
individual, each contribute $1,000 to LTP (lower-tier partnership)
for equal partnership interests. On March 1, 2008, LTP purchases QSB
stock for $500. On April 1, 2008, D, an individual, joins UTP by
contributing $500 to UTP for a 1/3 interest in UTP. On December 1,
2008, LTP sells the QSB stock for $2,000. * * *
* * * * *
Example 5. * * *
(v) * * * In accordance with the principles of Sec. 1.7431(j)(3), the amount of A's gain from the March 30, 2009, sale of
replacement QSB1 stock in which A has a $200 negative basis
adjustment equals $300 (A's share of PRS' gain from the sale of
replacement QSB1 stock ($100), increased by the amount of A's
negative basis adjustment for replacement QSB1 stock ($200)). * * *
* * * * *
Example 12. * * *
(ii) Because A purchased within 60 days of PRS' sale of the QSB
stock, replacement QSB stock for a cost equal to A's share of the
partnership's amount realized on the sale of the QSB stock, and

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because A made a valid election to apply section 1045 with respect
to A's share of the gain from PRS' sale of the QSB stock, A does not
recognize A's $100 distributive share of the gain from PRS' sale of
the QSB stock. * * *
* * * * *
LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division,
Associate Chief Counsel (Procedure and Administration).
[FR Doc. E7-19869 Filed 10-9-07; 8:45 am]
BILLING CODE 4830-01-P

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