80 FR 53732 - Integrated Hedging Transactions of Qualifying Debt

DEPARTMENT OF THE TREASURY
Internal Revenue Service

Federal Register Volume 80, Issue 173 (September 8, 2015)

Page Range		53732-53735
FR Document		2015-22554
This document contains final regulations that address certain integrated transactions that involve a foreign currency denominated debt instrument and multiple associated hedging transactions. The regulations provide that if a taxpayer has identified multiple hedges as being part of a qualified hedging transaction, and the taxpayer has terminated at least one but less than all of the hedges (including a portion of one or more of the hedges), the taxpayer must treat the remaining hedges as having been sold for fair market value on the date of disposition of the terminated hedge.
Federal Register, Volume 80 Issue 173 (Tuesday, September 8, 2015)
[Federal Register Volume 80, Number 173 (Tuesday, September 8, 2015)]
[Rules and Regulations]
[Pages 53732-53735]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-22554]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9736]
RIN 1545-BK98


Integrated Hedging Transactions of Qualifying Debt

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations and removal of temporary regulations.

-----------------------------------------------------------------------

SUMMARY: This document contains final regulations that address certain 
integrated transactions that involve a foreign currency denominated 
debt instrument and multiple associated hedging transactions. The 
regulations provide that if a taxpayer has identified multiple hedges 
as being part of a qualified hedging transaction, and the taxpayer has 
terminated at least one but less than all of the hedges (including a 
portion of one or more of the hedges), the taxpayer must treat the 
remaining hedges as having been sold for fair market value on the date 
of disposition of the terminated hedge.

DATES: Effective Date. These regulations are effective on September 8, 
2015.
    Applicability Date. These regulations apply to leg-outs within the 
meaning of Sec.  1.988-5(a)(6)(ii) that occur on or after September 6, 
2012.

FOR FURTHER INFORMATION CONTACT: Sheila Ramaswamy, at (202) 317-6938 
(not a toll-free number).

SUPPLEMENTARY INFORMATION: 

Background

    On September 5, 2012, the Treasury Department and the IRS issued 
temporary regulations (TD 9598) (the ``Temporary Regulations'') that 
revised the legging out rules of Sec.  1.988-5(a)(6)(ii) applicable to 
hedging transactions under section 988(d). No public hearing was 
requested or held. One comment was received, which is available at 
www.regulations.gov or upon request. After consideration of the 
comment, the Temporary Regulations are adopted as final regulations 
without substantive change. The Temporary Regulations are removed.

Summary of Comments and Explanation of Revisions

    The only comment received on the Temporary Regulations suggested 
that the promulgation of the Temporary Regulations was unnecessary 
because the prior regulations did not support the taxpayer reporting 
position that the Temporary Regulations were designed to prevent. The 
comment considered the taxpayer position addressed in the Temporary 
Regulations to be inconsistent with both the purposes of section 988(d) 
and the economic substance of the transaction. Although the comment 
finds the Temporary Regulations ultimately unnecessary, it acknowledges 
that the section 988 hedging rules are a complicated area of law and 
that the prior regulations could be improved to provide greater 
certainty to taxpayers. The Treasury Department and the IRS have 
determined that the Temporary Regulations are useful in clarifying the 
section 988(d) integration rules--as well as in preventing unintended 
approaches to legging out under those rules--and thus should be adopted 
as final.
    The comment recommended that the Treasury Department and the IRS 
consider aligning the hedge integration regime under section 988 with 
the approach taken in regulations under section 1275 on the basis that 
the section 1275 approach is more consistent with economic reality. The 
Sec.  1.1275-6 regulations generally allow the integration of a 
qualifying debt instrument with a hedge or combination of hedges if the 
combined cash flows of the components are substantially equivalent to 
the cash flows on a fixed or variable rate debt instrument. However, a 
financial instrument that hedges currency risk cannot be integrated as 
a Sec.  1.1275-6 hedge. See Sec.  1.1275-6(b)(2). Under the legging out 
rules of Sec.  1.1275-6, a taxpayer that legs out of an integrated 
transaction is treated as terminating the synthetic debt instrument for 
its fair market value and recognizing any gain or loss. If the taxpayer 
remains liable on the qualifying debt instrument after the leg-out, 
adjustments are made to reflect any difference between the fair market 
value of the qualifying debt instrument and its adjusted issue price. 
If the taxpayer remains a party to the Sec.  1.1275-6 hedge, the hedge 
is treated as entered into at its fair market value. By contrast, 
subject to Sec.  1.988-5T(a)(6)(ii)(F), the legging out rules under 
Sec.  1.988-5 treat a taxpayer that legs out of a synthetic debt 
instrument under section 988 as having disposed of any remaining 
hedges, and those hedges cannot be part of a qualified hedging 
transaction for any period after the leg-out date.
    The Treasury Department and the IRS have determined that achieving 
greater alignment between the hedge integration regimes under sections 
988 and 1275 is beyond the scope of this project and unnecessary to 
achieve the purpose of the Temporary Regulations. The limited purpose 
of the Temporary Regulations was to clarify the application of the 
legging out rules under Sec.  1.988-5 to a particular fact pattern 
rather than to undertake a more general revision of those rules. When 
some of the hedge components of a qualified hedging transaction are 
disposed of on a leg-out date, deeming a disposition of all remaining 
components is sufficient to achieve a clear reflection of income. 
Continuing to treat the remaining components as integrated, as under 
the rule of Sec.  1.1275-6, would represent a departure from the 
approach taken in the original Sec.  1.988-5 regulations. Nonetheless, 
the Treasury Department and the IRS will continue to consider whether 
the hedge integration regimes under sections 988 and 1275 should be 
modified and brought into closer conformity.
    As further support for the recommendation to achieve better 
alignment between Sec. Sec.  1.988-5 and 1.1275-6, the comment also 
suggested that the provision in Sec.  1.988-5T(a)(6)(ii)(F) of the 
Temporary Regulations, which was also included in the prior final 
regulations, would be unnecessary if the regulations were modified to 
conform to Sec.  1.1275-6. Under Sec.  1.988-5T(a)(6)(ii)(F), if a 
taxpayer legs out of a qualified hedging transaction and realizes a 
gain with respect to the debt instrument or hedge that is disposed of 
or otherwise terminated, then the taxpayer is not treated as legging 
out if during the period beginning 30 days before the leg-out date and 
ending 30 days after that date the taxpayer enters into another 
transaction that, taken together with any remaining components of the 
hedge, hedges at least 50 percent of the remaining currency flow with 
respect to the qualifying debt instrument that was part of the 
qualified hedging transaction. Section 1.988-5T(a)(6)(ii)(F) also 
provides a similar rule where a taxpayer has a qualified hedging 
transaction comprised of multiple components. In such a case, the 
taxpayer will not be treated as legging out of the qualified hedging 
transaction if the taxpayer terminates all or a part of one or more of 
the components and

[[Page 53733]]

realizes a net gain with respect to the terminated component, 
components, or portions thereof, provided that the remaining components 
of the hedge by themselves hedge at least 50 percent of the remaining 
currency flow with respect to the qualifying debt instrument that was 
part of the qualified hedging transaction.
    The comment suggests that this provision of the section 988 hedging 
rules is unnecessarily complex, as well as incomplete because it does 
not cover situations in which, upon legging out, a taxpayer recognizes 
a loss on the debt instrument or hedge that is disposed of or otherwise 
terminated. However, as stated in this preamble, in issuing the 
Temporary Regulations, the Treasury Department and the IRS only sought 
to clarify the application of the section 988 hedging rules to a 
particular fact pattern and did not seek to undertake a more general 
revision of those rules. Accordingly, the Treasury Department and the 
IRS have determined that modifications to Sec.  1.988-5T(a)(6)(ii)(F) 
are beyond the scope of this guidance project. However, the Treasury 
Department and the IRS will continue to consider whether any 
modifications to the rule are necessary or appropriate.
    Finally, the comment also recommended that, even if the final 
regulations do not adopt the recommendation to align with the approach 
taken in Sec.  1.1275-6, the Temporary Regulations should be modified 
to provide that, when an issuer of a qualifying debt instrument legs 
out but continues to be the obligor on the qualifying debt instrument, 
the issuer should be deemed to repurchase and reissue the debt 
instrument for its then fair market value. The Temporary Regulations 
instead provide that, in such a case, the debt instrument is ``treated 
as sold for its fair market value.'' The comment notes that the sale of 
a debt instrument has no tax consequences for the issuer of the 
instrument. The Treasury Department and the IRS agree that this aspect 
of the Temporary Regulations should be modified and, for the sake of 
consistency, these final regulations adopt the phrasing ``treated as 
sold or otherwise terminated by the taxpayer for its fair market 
value,'' which is used in Sec.  1.988-5(a)(6)(i)(C) (regarding legging 
in).
    The final regulations also update the dates in two existing 
examples, to be consistent with the applicability date of the revised 
legging out rules. Additionally, the final regulations reflect minor 
wording changes to the Temporary Regulations for purposes of improving 
clarity. The Treasury Department and the IRS do not intend these 
changes to be interpreted as substantive changes to the Temporary 
Regulations.

Special Analyses

    Certain IRS regulations, including this one, are exempt from the 
requirements of Executive Order 12866, as supplemented and reaffirmed 
by Executive Order 13563. Therefore, a regulatory impact assessment is 
not required. It has also been determined that section 553(b) of the 
Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to 
these regulations. It is hereby certified that these regulations will 
not have a significant impact on a substantial number of small 
entities. This certification is based upon the fact that these 
regulations merely clarify an existing standard and do not impose a 
collection of information on small entities. Accordingly, a Regulatory 
Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. 
chapter 6) is not required. Pursuant to section 7805(f) of the Internal 
Revenue Code, the notice of proposed rulemaking preceding this 
regulation was submitted to the Chief Counsel for Advocacy of the Small 
Business Administration for comment on its impact on small business.

Drafting Information

    The principal author of these regulations is Sheila Ramaswamy, 
Office of Associate Chief Counsel (International). However, other 
personnel from the IRS and the Treasury Department participated in 
their development.

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

Adoptions of Amendment to the Regulations

    Accordingly, 26 CFR part 1 is amended as follows:

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 * * *

    Par. 2. Section 1.988-5 is amended by:

0
1. Revising paragraph (a)(6)(ii).
0
2. Adding Example 11 to paragraph (a)(9)(iv).
0
3. Revising paragraph (a)(10)(iv).
    The revisions and addition read as follows:


Sec.  1.988-5  Section 988(d) hedging transactions.

    (a) * * *
    (6) * * *
    (ii) Legging out. With respect to a qualifying debt instrument and 
hedge that are properly identified as a qualified hedging transaction, 
``legging out'' of integrated treatment under this paragraph (a) means 
that the taxpayer disposes of or otherwise terminates all or any 
portion of the qualifying debt instrument or the hedge before maturity 
of the qualified hedging transaction. For purposes of the preceding 
sentence, if the taxpayer changes a material term of the qualifying 
debt instrument (for example, exercises an option to change the 
interest rate or index, or the maturity date) or the hedge (for 
example, changes the interest or exchange rates underlying the hedge, 
or the expiration date) before maturity of the qualified hedging 
transaction, the taxpayer will be deemed to have disposed of or 
otherwise terminated all or any portion of the qualifying debt 
instrument or the hedge, as applicable. A taxpayer that disposes of or 
terminates a qualified hedging transaction (that is, disposes of or 
terminates both the qualifying debt instrument and the hedge in their 
entirety on the same day) is considered to have disposed of or 
otherwise terminated the synthetic debt instrument rather than legging 
out. See paragraph (a)(9)(iv) of this section, Example 10 for an 
illustration of this rule. If a taxpayer legs out of integrated 
treatment, the following rules apply:
    (A) The transaction will be treated as a qualified hedging 
transaction during the time the requirements of this paragraph (a) were 
satisfied.
    (B) If all of the instruments comprising the hedge (each such 
instrument, a component) are disposed of or otherwise terminated, the 
qualifying debt instrument is treated as sold or otherwise terminated 
by the taxpayer for its fair market value on the date the hedge is 
disposed of or otherwise terminated (the leg-out date), and any gain or 
loss (including gain or loss resulting from factors other than 
movements in exchange rates) from the identification date to the leg-
out date is realized and recognized on the leg-out date. The spot rate 
on the leg-out date is used to determine exchange gain or loss on the 
debt instrument for the period beginning on the leg-out date and ending 
on the date such instrument matures or is disposed of or otherwise 
terminated. Proper adjustment must be made to reflect any gain or loss 
taken into account. The netting rule of Sec.  1.988-2(b)(8) applies. 
See paragraph

[[Page 53734]]

(a)(9)(iv) of this section, Example 4 and Example 5 for an illustration 
of this rule.
    (C) If a hedge has more than one component (and such components 
have been properly identified as being part of the qualified hedging 
transaction) and at least one but not all of the components that 
comprise the hedge has been disposed of or otherwise terminated, or if 
part of any component of the hedge has been terminated (whether a hedge 
consists of a single or multiple components), the date such component 
(or part thereof) is disposed of or terminated is considered the leg-
out date and the qualifying debt instrument is treated as sold or 
otherwise terminated by the taxpayer for its fair market value in 
accordance with the rules of paragraph (a)(6)(ii)(B) of this section on 
such leg-out date. In addition, all of the remaining components (or 
parts thereof) that have not been disposed of or otherwise terminated 
are treated as sold by the taxpayer for their fair market value on the 
leg-out date, and any gain or loss from the identification date to the 
leg-out date is realized and recognized on the leg-out date. To the 
extent relevant, the spot rate on the leg-out date is used to determine 
exchange gain or loss on the remaining components (or parts thereof) 
for the period beginning on the leg-out date and ending on the date 
such components (or parts thereof) are disposed of or otherwise 
terminated. See paragraph (a)(9)(iv) of this section, Example 11 for an 
illustration of this rule.
    (D) If the qualifying debt instrument is disposed of or otherwise 
terminated in whole or in part, the date of such disposition or 
termination is considered the leg-out date. Accordingly, the hedge 
(including all components making up the hedge in their entirety) that 
is part of the qualified hedging transaction is treated as sold by the 
taxpayer for its fair market value on the leg-out date, and any gain or 
loss from the identification date to the leg-out date is realized and 
recognized on the leg-out date. To the extent relevant, the spot rate 
on the leg-out date is used to determine exchange gain or loss on the 
hedge (including all components thereof) for the period beginning on 
the leg-out date and ending on the date such hedge is disposed of or 
otherwise terminated.
    (E) Except as provided in paragraph (a)(8)(iii) of this section 
(regarding identification by the Commissioner), the part of the 
qualified hedging transaction that has not been disposed of or 
otherwise terminated (that is, the remaining debt instrument in its 
entirety even if partially hedged, or the remaining components of the 
hedge) cannot be part of a qualified hedging transaction for any period 
after the leg-out date.
    (F) If a taxpayer legs out of a qualified hedging transaction and 
realizes a net gain with respect to the debt instrument that is 
disposed of or otherwise terminated, then paragraph (a)(6)(ii)(B), (C), 
and (D) of this section, as appropriate, will not apply if during the 
period beginning 30 days before the leg-out date and ending 30 days 
after that date the taxpayer enters into another transaction that, 
taken together with any remaining components of the hedge, hedges at 
least 50 percent of the remaining currency flow with respect to the 
qualifying debt instrument that was part of the qualified hedging 
transaction or, if appropriate, an equivalent amount under the hedge 
(or any remaining components thereof) that was part of the qualified 
hedging transaction. Similarly, in a case in which a hedge has multiple 
components that are part of a qualified hedging transaction, if the 
taxpayer legs out of a qualified hedging transaction by terminating one 
such component or a part of one or more such components and realizes a 
net gain with respect to the terminated component, components, or 
portions thereof, then paragraphs (a)(6)(ii)(B), (C), and (D) of this 
section, as appropriate, will not apply if the remaining components of 
the hedge (including parts thereof) by themselves hedge at least 50 
percent of the remaining currency flow with respect to the qualifying 
debt instrument that was part of the qualified hedging transaction. See 
paragraph (a)(9)(iv) of this section, Example 11 for an illustration of 
this rule.
* * * * *
    (9) * * *
    (iv) * * *
    Example 11.  (i) K is a domestic corporation with the U.S. 
dollar as its functional currency. On January 1, 2013, K borrows 100 
British pounds ([pound]) for two years at a 10% rate of interest 
payable on December 31 of each year with no principal payment due 
until maturity on December 31, 2014. Assume that the spot rate on 
January 1, 2013, is [pound]1=$1. On the same date, K enters into two 
swap contracts with an unrelated counterparty that economically 
results in the transformation of the fixed rate [pound]100 borrowing 
to a floating rate dollar borrowing. The terms of the swaps are as 
follows:
    (A) Swap #1, Currency swap. On January 1, 2013, K will exchange 
[pound]100 for $100.
    (1) On December 31 of both 2013 and 2014, K will exchange $8 for 
[pound]10;
    (2) On December 31, 2014, K will exchange $100 for [pound]100.
    (B) Swap #2, Interest rate swap. On December 31 of both 2013 and 
2014, K will pay LIBOR times a notional principal amount of $100 and 
will receive 8% times the same $100 notional principal amount.
    (ii) Assume that K properly identifies the pound borrowing and 
the swap contracts as a qualified hedging transaction as provided in 
paragraph (a)(8)(i) of this section and that the other relevant 
requirements of paragraph (a) of this section are satisfied.
    (iii) On January 1, 2014, the spot exchange rate is [pound]1=$2; 
the U.S. dollar LIBOR rate of interest is 9%; the market value of 
K's note in pounds has not changed; and K terminates swap #2. 
Because interest rates have increased from 8% to 9%, K will incur a 
loss of ($.92) (the present value of the ($1) difference between the 
8% and 9% interest payments discounted at the current interest rate 
of 9%) with respect to the termination of such swap on January 1, 
2014. Pursuant to paragraph (a)(6)(ii)(C) of this section, K must 
treat swap #1 as having been sold for its fair market value on the 
leg-out date, which is the date swap #2 is terminated. K must 
realize and recognize gain of $100.92 (the present value of 
[pound]110 discounted in pounds to equal [pound]100 x $2 ($200) less 
the present value of $108 ($99.08)). The loss inherent in the pound 
borrowing from January 1, 2013 to January 1, 2014 is realized and 
recognized on January 1, 2014. Such loss is exchange loss in the 
amount of $100 (the present value of [pound]110 that was to be paid 
at the end of the year discounted at pound interest rates to equal 
[pound]100 times the change in exchange rates: ([pound]100 x $1, the 
spot rate on January 1, 2013)-([pound]100 x $2, the spot rate on 
January 1, 2014)). Pursuant to paragraph (a)(6)(ii)(E) of this 
section, except as provided in paragraph (a)(8)(iii) of this section 
(regarding identification by the Commissioner), the pound borrowing 
and currency swap cannot be part of a qualified hedging transaction 
for any period after the leg-out date.
    (iv) Assume the facts are the same as in paragraph (iii) of this 
Example except that on January 1, 2014, the U.S. dollar LIBOR rate 
of interest is 7% rather than 9%. When K terminates swap #2, K will 
realize gain of $0.93 (the present value of the ($1) difference 
between the 8% and 7% interest payments discounted at the current 
interest rate of 7%) received with respect to the termination on 
January 1, 2014. Fifty percent or more of the remaining pound cash 
flow of the pound borrowing remains hedged after the termination of 
swap #2. Accordingly, under paragraph (a)(6)(ii)(F) of this section, 
paragraphs (a)(6)(ii)(B) and (C) of this section do not apply, and 
the gain on swap #1 and the loss on the qualifying debt instrument 
are not taken into account. Thus, K will include in income $0.93 
realized from the termination of swap #2.

    (10) * * *
    (iv) Effective/applicability dates for legging in and legging out 
rules. (A) The rules of paragraph (a)(6)(i) of this section are 
effective for qualified hedging transactions that are legged into after 
March 17, 1992.
    (B) The rules of paragraph (a)(6)(ii) and Example 11 of paragraph 
(a)(9)(iv)

[[Page 53735]]

of this section apply to leg-outs that occur on or after September 6, 
2012.
* * * * *


Sec.  1.988-5  [Amended]

0
Par. 3. For each section listed in the table, remove the language in 
the ``Remove'' column and add in its place the language in the ``Add'' 
column as set forth below:

------------------------------------------------------------------------
             Section                    Remove                Add
------------------------------------------------------------------------
Sec.   1.988-5(a)(9)(iv),         January 1, 1990...  January 1, 2013.
 Example 4, paragraph (i),
 second, third and fourth
 sentences.
Sec.   1.988-5(a)(9)(iv),         December 31, 1990.  December 31, 2013.
 Example 4, paragraph (i), table.
Sec.   1.988-5(a)(9)(iv),         December 31, 1991.  December 31, 2014.
 Example 4, paragraph (i), table.
Sec.   1.988-5(a)(9)(iv),         December 31, 1992.  December 31, 2015.
 Example 4, paragraph (i), table.
Sec.   1.988-5(a)(9)(iv),         1990..............  2013.
 Example 4, paragraph (iii)(B).
Sec.   1.988-5(a)(9)(iv),         1991..............  2014.
 Example 4, paragraph (iii)(B).
Sec.   1.988-5(a)(9)(iv),         1992..............  2015.
 Example 4, paragraph (iii)(B).
Sec.   1.988-5(a)(9)(iv),         1992..............  2015.
 Example 4, paragraph (iii)(D),
 second sentence.
Sec.   1.988-5(a)(9)(iv),         January 1, 1991...  January 1, 2014.
 Example 4, paragraph (iv),
 first, second, fourth, fifth,
 and sixth sentences.
Sec.   1.988-5(a)(9)(iv),         January 1, 1990...  January 1, 2013.
 Example 4, paragraph (iv),
 first, fourth, and fifth
 sentences.
Sec.   1.988-5(a)(9)(iv),         1990..............  2013.
 Example 4, paragraph (iv),
 third sentence.
Sec.   1.988-5(a)(9)(iv),         December 31, 1992.  December 31, 2015.
 Example 4, paragraph (iv),
 sixth and seventh sentences.
Sec.   1.988-5(a)(9)(iv),         January 1, 1990...  January 1, 2013.
 Example 5, paragraph (i),
 second, fourth, and fifth
 sentences.
Sec.   1.988-5(a)(9)(iv),         December 31, 1990.  December 31, 2013.
 Example 5, paragraph (i), table.
Sec.   1.988-5(a)(9)(iv),         December 31, 1991.  December 31, 2014.
 Example 5, paragraph (i), table.
Sec.   1.988-5(a)(9)(iv),         December 31, 1992.  December 31, 2015.
 Example 5, paragraph (i), table.
Sec.   1.988-5(a)(9)(iv),         January 1, 1991...  January 1, 2014.
 Example 5, paragraph (ii),
 second and third sentences.
Sec.   1.988-5(a)(9)(iv),         January 1, 1990...  January 1, 2013.
 Example 5, paragraph (ii),
 second sentence.
Sec.   1.988-5(a)(9)(iv),         December 31, 1991.  December 31, 2014.
 Example 5, paragraph (ii),
 third sentence.
Sec.   1.988-5(a)(9)(iv),         December 31, 1992.  December 31, 2015.
 Example 5, paragraph (ii),
 third sentence.
Sec.   1.988-5(a)(9)(iv),         1991..............  2014.
 Example 5, paragraph (ii),
 third sentence.
Sec.   1.988-5(a)(9)(iv),         1992..............  2015.
 Example 5, paragraph (ii),
 third sentence.
Sec.   1.988-5(a)(9)(iv),         January 1, 1990...  January 1, 2013.
 Example 5, paragraph (iii),
 second sentence.
Sec.   1.988-5(a)(9)(iv),         January 1, 1991...  January 1, 2014.
 Example 5, paragraph (iii),
 second sentence.
Sec.   1.988-5(a)(9)(iv),         1990..............  2013.
 Example 5, paragraph (iii)(B).
Sec.   1.988-5(a)(9)(iv),         1991..............  2014.
 Example 5, paragraph (iii)(B).
Sec.   1.988-5(a)(9)(iv),         1992..............  2015.
 Example 5, paragraph (iii)(B).
Sec.   1.988-5(a)(9)(iv),         1990..............  2013.
 Example 5, paragraph (iii)(C),
 first sentence.
Sec.   1.988-5(a)(9)(iv),         1991..............  2014.
 Example 5, paragraph (iii)(C),
 first sentence.
Sec.   1.988-5(a)(9)(iv),         1992..............  2015.
 Example 5, paragraph (iii)(C),
 first sentence.
Sec.   1.988-5(a)(9)(iv),         1990..............  2013.
 Example 5, paragraph (iii)(D),
 second sentence.
Sec.   1.988-5(a)(9)(iv),         January 1, 1991...  January 1, 2014.
 Example 5, paragraph (iv),
 first, second, third, and sixth
 sentences.
Sec.   1.988-5(a)(9)(iv),         1990..............  2013.
 Example 5, paragraph (iv),
 fourth sentence.
------------------------------------------------------------------------

Sec.  1.988-5T  [Removed]

0
Par. 4. Section 1.988-5T is removed.

John Dalrymple,
Deputy Commissioner for Services and Enforcement.
    Approved: August 25, 2015.
Mark J. Mazur,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. 2015-22554 Filed 9-3-15; 4:15 pm]
 BILLING CODE 4830-01-P
53732 Federal Register / Vol. 80, No. 173 / Tuesday, September 8, 2015 / Rules and Regulations

Dated: August 25, 2015. are adopted as final regulations without instrument under section 988 as having
Edward L. Golding, substantive change. The Temporary disposed of any remaining hedges, and
Principal Deputy Assistant Secretary for Regulations are removed. those hedges cannot be part of a
Housing. qualified hedging transaction for any
Summary of Comments and
Approved: August 25, 2015. period after the leg-out date.
Explanation of Revisions The Treasury Department and the IRS
Laura H. Hogshead,
The only comment received on the have determined that achieving greater
Chief Operating Officer.
Temporary Regulations suggested that alignment between the hedge
[FR Doc. 2015–21774 Filed 9–4–15; 8:45 am] the promulgation of the Temporary integration regimes under sections 988
BILLING CODE 4210–67–P Regulations was unnecessary because and 1275 is beyond the scope of this
the prior regulations did not support the project and unnecessary to achieve the
taxpayer reporting position that the purpose of the Temporary Regulations.
DEPARTMENT OF THE TREASURY Temporary Regulations were designed The limited purpose of the Temporary
to prevent. The comment considered the Regulations was to clarify the
Internal Revenue Service taxpayer position addressed in the application of the legging out rules
Temporary Regulations to be under § 1.988–5 to a particular fact
26 CFR Part 1 inconsistent with both the purposes of pattern rather than to undertake a more
[TD 9736] section 988(d) and the economic general revision of those rules. When
substance of the transaction. Although some of the hedge components of a
RIN 1545–BK98 the comment finds the Temporary qualified hedging transaction are
Regulations ultimately unnecessary, it disposed of on a leg-out date, deeming
Integrated Hedging Transactions of acknowledges that the section 988 a disposition of all remaining
Qualifying Debt hedging rules are a complicated area of components is sufficient to achieve a
AGENCY: Internal Revenue Service (IRS), law and that the prior regulations could clear reflection of income. Continuing to
Treasury. be improved to provide greater certainty treat the remaining components as
ACTION: Final regulations and removal of
to taxpayers. The Treasury Department integrated, as under the rule of
temporary regulations. and the IRS have determined that the § 1.1275–6, would represent a departure
Temporary Regulations are useful in from the approach taken in the original
SUMMARY: This document contains final clarifying the section 988(d) integration § 1.988–5 regulations. Nonetheless, the
regulations that address certain rules—as well as in preventing Treasury Department and the IRS will
integrated transactions that involve a unintended approaches to legging out continue to consider whether the hedge
foreign currency denominated debt under those rules—and thus should be integration regimes under sections 988
instrument and multiple associated adopted as final. and 1275 should be modified and
hedging transactions. The regulations The comment recommended that the brought into closer conformity.
provide that if a taxpayer has identified Treasury Department and the IRS As further support for the
multiple hedges as being part of a consider aligning the hedge integration recommendation to achieve better
qualified hedging transaction, and the regime under section 988 with the alignment between §§ 1.988–5 and
taxpayer has terminated at least one but approach taken in regulations under 1.1275–6, the comment also suggested
less than all of the hedges (including a section 1275 on the basis that the that the provision in § 1.988–
portion of one or more of the hedges), section 1275 approach is more 5T(a)(6)(ii)(F) of the Temporary
the taxpayer must treat the remaining consistent with economic reality. The Regulations, which was also included in
hedges as having been sold for fair § 1.1275–6 regulations generally allow the prior final regulations, would be
market value on the date of disposition the integration of a qualifying debt unnecessary if the regulations were
of the terminated hedge. instrument with a hedge or combination modified to conform to § 1.1275–6.
of hedges if the combined cash flows of Under § 1.988–5T(a)(6)(ii)(F), if a
DATES: Effective Date. These regulations
the components are substantially taxpayer legs out of a qualified hedging
are effective on September 8, 2015. equivalent to the cash flows on a fixed transaction and realizes a gain with
Applicability Date. These regulations or variable rate debt instrument. respect to the debt instrument or hedge
apply to leg-outs within the meaning of However, a financial instrument that that is disposed of or otherwise
§ 1.988–5(a)(6)(ii) that occur on or after hedges currency risk cannot be terminated, then the taxpayer is not
September 6, 2012. integrated as a § 1.1275–6 hedge. See treated as legging out if during the
FOR FURTHER INFORMATION CONTACT: § 1.1275–6(b)(2). Under the legging out period beginning 30 days before the leg-
Sheila Ramaswamy, at (202) 317–6938 rules of § 1.1275–6, a taxpayer that legs out date and ending 30 days after that
(not a toll-free number). out of an integrated transaction is date the taxpayer enters into another
SUPPLEMENTARY INFORMATION: treated as terminating the synthetic debt transaction that, taken together with any
instrument for its fair market value and remaining components of the hedge,
Background recognizing any gain or loss. If the hedges at least 50 percent of the
On September 5, 2012, the Treasury taxpayer remains liable on the remaining currency flow with respect to
Department and the IRS issued qualifying debt instrument after the leg- the qualifying debt instrument that was
temporary regulations (TD 9598) (the out, adjustments are made to reflect any part of the qualified hedging
‘‘Temporary Regulations’’) that revised difference between the fair market value transaction. Section 1.988–5T(a)(6)(ii)(F)
the legging out rules of § 1.988– of the qualifying debt instrument and its also provides a similar rule where a
adjusted issue price. If the taxpayer
rmajette on DSK7SPTVN1PROD with RULES

5(a)(6)(ii) applicable to hedging taxpayer has a qualified hedging
transactions under section 988(d). No remains a party to the § 1.1275–6 hedge, transaction comprised of multiple
public hearing was requested or held. the hedge is treated as entered into at its components. In such a case, the
One comment was received, which is fair market value. By contrast, subject to taxpayer will not be treated as legging
available at www.regulations.gov or § 1.988–5T(a)(6)(ii)(F), the legging out out of the qualified hedging transaction
upon request. After consideration of the rules under § 1.988–5 treat a taxpayer if the taxpayer terminates all or a part
comment, the Temporary Regulations that legs out of a synthetic debt of one or more of the components and

VerDate Sep<11>2014 15:42 Sep 04, 2015 Jkt 235001 PO 00000 Frm 00042 Fmt 4700 Sfmt 4700 E:\FR\FM\08SER1.SGM 08SER1
Federal Register / Vol. 80, No. 173 / Tuesday, September 8, 2015 / Rules and Regulations 53733

realizes a net gain with respect to the Department and the IRS do not intend § 1.988–5 Section 988(d) hedging
terminated component, components, or these changes to be interpreted as transactions.
portions thereof, provided that the substantive changes to the Temporary (a) * * *
remaining components of the hedge by Regulations. (6) * * *
themselves hedge at least 50 percent of (ii) Legging out. With respect to a
Special Analyses qualifying debt instrument and hedge
the remaining currency flow with
respect to the qualifying debt Certain IRS regulations, including this that are properly identified as a
instrument that was part of the qualified one, are exempt from the requirements qualified hedging transaction, ‘‘legging
hedging transaction. of Executive Order 12866, as out’’ of integrated treatment under this
The comment suggests that this supplemented and reaffirmed by paragraph (a) means that the taxpayer
provision of the section 988 hedging Executive Order 13563. Therefore, a disposes of or otherwise terminates all
rules is unnecessarily complex, as well regulatory impact assessment is not or any portion of the qualifying debt
as incomplete because it does not cover required. It has also been determined instrument or the hedge before maturity
situations in which, upon legging out, a that section 553(b) of the Administrative of the qualified hedging transaction. For
taxpayer recognizes a loss on the debt Procedure Act (5 U.S.C. chapter 5) does purposes of the preceding sentence, if
instrument or hedge that is disposed of not apply to these regulations. It is the taxpayer changes a material term of
or otherwise terminated. However, as hereby certified that these regulations the qualifying debt instrument (for
stated in this preamble, in issuing the will not have a significant impact on a example, exercises an option to change
Temporary Regulations, the Treasury substantial number of small entities. the interest rate or index, or the
Department and the IRS only sought to This certification is based upon the fact maturity date) or the hedge (for
clarify the application of the section 988 that these regulations merely clarify an example, changes the interest or
hedging rules to a particular fact pattern existing standard and do not impose a exchange rates underlying the hedge, or
and did not seek to undertake a more collection of information on small the expiration date) before maturity of
general revision of those rules. entities. Accordingly, a Regulatory the qualified hedging transaction, the
Accordingly, the Treasury Department taxpayer will be deemed to have
Flexibility Analysis under the
and the IRS have determined that disposed of or otherwise terminated all
Regulatory Flexibility Act (5 U.S.C.
modifications to § 1.988–5T(a)(6)(ii)(F) or any portion of the qualifying debt
chapter 6) is not required. Pursuant to
are beyond the scope of this guidance instrument or the hedge, as applicable.
section 7805(f) of the Internal Revenue
project. However, the Treasury A taxpayer that disposes of or
Code, the notice of proposed rulemaking
Department and the IRS will continue to terminates a qualified hedging
preceding this regulation was submitted
consider whether any modifications to transaction (that is, disposes of or
to the Chief Counsel for Advocacy of the
the rule are necessary or appropriate. terminates both the qualifying debt
Small Business Administration for
Finally, the comment also instrument and the hedge in their
comment on its impact on small
recommended that, even if the final entirety on the same day) is considered
business. to have disposed of or otherwise
regulations do not adopt the
recommendation to align with the Drafting Information terminated the synthetic debt
approach taken in § 1.1275–6, the instrument rather than legging out. See
The principal author of these paragraph (a)(9)(iv) of this section,
Temporary Regulations should be
regulations is Sheila Ramaswamy, Example 10 for an illustration of this
modified to provide that, when an
Office of Associate Chief Counsel rule. If a taxpayer legs out of integrated
issuer of a qualifying debt instrument
legs out but continues to be the obligor (International). However, other treatment, the following rules apply:
on the qualifying debt instrument, the personnel from the IRS and the Treasury (A) The transaction will be treated as
issuer should be deemed to repurchase Department participated in their a qualified hedging transaction during
and reissue the debt instrument for its development. the time the requirements of this
then fair market value. The Temporary List of Subjects in 26 CFR Part 1 paragraph (a) were satisfied.
Regulations instead provide that, in (B) If all of the instruments
such a case, the debt instrument is Income taxes, Reporting and comprising the hedge (each such
‘‘treated as sold for its fair market recordkeeping requirements. instrument, a component) are disposed
value.’’ The comment notes that the sale Adoptions of Amendment to the of or otherwise terminated, the
of a debt instrument has no tax Regulations qualifying debt instrument is treated as
consequences for the issuer of the sold or otherwise terminated by the
instrument. The Treasury Department Accordingly, 26 CFR part 1 is taxpayer for its fair market value on the
and the IRS agree that this aspect of the amended as follows: date the hedge is disposed of or
Temporary Regulations should be otherwise terminated (the leg-out date),
PART 1—INCOME TAXES and any gain or loss (including gain or
modified and, for the sake of
consistency, these final regulations loss resulting from factors other than
■ Paragraph 1. The authority citation movements in exchange rates) from the
adopt the phrasing ‘‘treated as sold or
for part 1 continues to read in part as identification date to the leg-out date is
otherwise terminated by the taxpayer for
follows: realized and recognized on the leg-out
its fair market value,’’ which is used in
§ 1.988–5(a)(6)(i)(C) (regarding legging Authority: 26 U.S.C. 7805 * * * date. The spot rate on the leg-out date
in). Par. 2. Section 1.988–5 is amended is used to determine exchange gain or
The final regulations also update the by: loss on the debt instrument for the
dates in two existing examples, to be period beginning on the leg-out date and
rmajette on DSK7SPTVN1PROD with RULES

consistent with the applicability date of ■ 1. Revising paragraph (a)(6)(ii). ending on the date such instrument
the revised legging out rules. ■ 2. Adding Example 11 to paragraph matures or is disposed of or otherwise
Additionally, the final regulations (a)(9)(iv). terminated. Proper adjustment must be
reflect minor wording changes to the ■ 3. Revising paragraph (a)(10)(iv). made to reflect any gain or loss taken
Temporary Regulations for purposes of The revisions and addition read as into account. The netting rule of
improving clarity. The Treasury follows: § 1.988–2(b)(8) applies. See paragraph

VerDate Sep<11>2014 15:42 Sep 04, 2015 Jkt 235001 PO 00000 Frm 00043 Fmt 4700 Sfmt 4700 E:\FR\FM\08SER1.SGM 08SER1
53734 Federal Register / Vol. 80, No. 173 / Tuesday, September 8, 2015 / Rules and Regulations

(a)(9)(iv) of this section, Example 4 and entirety even if partially hedged, or the of $100 and will receive 8% times the same
Example 5 for an illustration of this remaining components of the hedge) $100 notional principal amount.
rule. cannot be part of a qualified hedging (ii) Assume that K properly identifies the
(C) If a hedge has more than one transaction for any period after the leg- pound borrowing and the swap contracts as
component (and such components have a qualified hedging transaction as provided
out date. in paragraph (a)(8)(i) of this section and that
been properly identified as being part of (F) If a taxpayer legs out of a qualified the other relevant requirements of paragraph
the qualified hedging transaction) and at hedging transaction and realizes a net (a) of this section are satisfied.
least one but not all of the components gain with respect to the debt instrument (iii) On January 1, 2014, the spot exchange
that comprise the hedge has been that is disposed of or otherwise rate is £1=$2; the U.S. dollar LIBOR rate of
disposed of or otherwise terminated, or terminated, then paragraph (a)(6)(ii)(B), interest is 9%; the market value of K’s note
if part of any component of the hedge (C), and (D) of this section, as in pounds has not changed; and K terminates
has been terminated (whether a hedge appropriate, will not apply if during the swap #2. Because interest rates have
consists of a single or multiple period beginning 30 days before the leg- increased from 8% to 9%, K will incur a loss
components), the date such component out date and ending 30 days after that of ($.92) (the present value of the ($1)
(or part thereof) is disposed of or date the taxpayer enters into another difference between the 8% and 9% interest
terminated is considered the leg-out payments discounted at the current interest
transaction that, taken together with any rate of 9%) with respect to the termination
date and the qualifying debt instrument remaining components of the hedge, of such swap on January 1, 2014. Pursuant
is treated as sold or otherwise hedges at least 50 percent of the to paragraph (a)(6)(ii)(C) of this section, K
terminated by the taxpayer for its fair remaining currency flow with respect to must treat swap #1 as having been sold for
market value in accordance with the the qualifying debt instrument that was its fair market value on the leg-out date,
rules of paragraph (a)(6)(ii)(B) of this part of the qualified hedging transaction which is the date swap #2 is terminated. K
section on such leg-out date. In or, if appropriate, an equivalent amount must realize and recognize gain of $100.92
addition, all of the remaining under the hedge (or any remaining (the present value of £110 discounted in
components (or parts thereof) that have components thereof) that was part of the pounds to equal £100 × $2 ($200) less the
not been disposed of or otherwise qualified hedging transaction. Similarly, present value of $108 ($99.08)). The loss
terminated are treated as sold by the inherent in the pound borrowing from
in a case in which a hedge has multiple January 1, 2013 to January 1, 2014 is realized
taxpayer for their fair market value on components that are part of a qualified and recognized on January 1, 2014. Such loss
the leg-out date, and any gain or loss hedging transaction, if the taxpayer legs is exchange loss in the amount of $100 (the
from the identification date to the leg- out of a qualified hedging transaction by present value of £110 that was to be paid at
out date is realized and recognized on terminating one such component or a the end of the year discounted at pound
the leg-out date. To the extent relevant, part of one or more such components interest rates to equal £100 times the change
the spot rate on the leg-out date is used and realizes a net gain with respect to in exchange rates: (£100 × $1, the spot rate
to determine exchange gain or loss on the terminated component, components, on January 1, 2013)¥(£100 × $2, the spot rate
the remaining components (or parts or portions thereof, then paragraphs on January 1, 2014)). Pursuant to paragraph
thereof) for the period beginning on the (a)(6)(ii)(E) of this section, except as provided
(a)(6)(ii)(B), (C), and (D) of this section, in paragraph (a)(8)(iii) of this section
leg-out date and ending on the date such as appropriate, will not apply if the
components (or parts thereof) are (regarding identification by the
remaining components of the hedge Commissioner), the pound borrowing and
disposed of or otherwise terminated. (including parts thereof) by themselves currency swap cannot be part of a qualified
See paragraph (a)(9)(iv) of this section, hedge at least 50 percent of the hedging transaction for any period after the
Example 11 for an illustration of this remaining currency flow with respect to leg-out date.
rule. the qualifying debt instrument that was (iv) Assume the facts are the same as in
(D) If the qualifying debt instrument paragraph (iii) of this Example except that on
part of the qualified hedging
is disposed of or otherwise terminated January 1, 2014, the U.S. dollar LIBOR rate
transaction. See paragraph (a)(9)(iv) of
in whole or in part, the date of such of interest is 7% rather than 9%. When K
this section, Example 11 for an terminates swap #2, K will realize gain of
disposition or termination is considered
illustration of this rule. $0.93 (the present value of the ($1) difference
the leg-out date. Accordingly, the hedge
(including all components making up * * * * * between the 8% and 7% interest payments
the hedge in their entirety) that is part (9) * * * discounted at the current interest rate of 7%)
of the qualified hedging transaction is (iv) * * * received with respect to the termination on
Example 11. (i) K is a domestic January 1, 2014. Fifty percent or more of the
treated as sold by the taxpayer for its corporation with the U.S. dollar as its remaining pound cash flow of the pound
fair market value on the leg-out date, functional currency. On January 1, 2013, K borrowing remains hedged after the
and any gain or loss from the borrows 100 British pounds (£) for two years termination of swap #2. Accordingly, under
identification date to the leg-out date is at a 10% rate of interest payable on December paragraph (a)(6)(ii)(F) of this section,
realized and recognized on the leg-out 31 of each year with no principal payment paragraphs (a)(6)(ii)(B) and (C) of this section
date. To the extent relevant, the spot due until maturity on December 31, 2014. do not apply, and the gain on swap #1 and
rate on the leg-out date is used to Assume that the spot rate on January 1, 2013, the loss on the qualifying debt instrument are
is £1=$1. On the same date, K enters into two not taken into account. Thus, K will include
determine exchange gain or loss on the swap contracts with an unrelated
hedge (including all components in income $0.93 realized from the
counterparty that economically results in the termination of swap #2.
thereof) for the period beginning on the transformation of the fixed rate £100
leg-out date and ending on the date such borrowing to a floating rate dollar borrowing. (10) * * *
hedge is disposed of or otherwise The terms of the swaps are as follows:
terminated. (A) Swap #1, Currency swap. On January (iv) Effective/applicability dates for
(E) Except as provided in paragraph 1, 2013, K will exchange £100 for $100. legging in and legging out rules. (A) The
rmajette on DSK7SPTVN1PROD with RULES

(a)(8)(iii) of this section (regarding (1) On December 31 of both 2013 and 2014, rules of paragraph (a)(6)(i) of this
K will exchange $8 for £10; section are effective for qualified
identification by the Commissioner), the
(2) On December 31, 2014, K will exchange hedging transactions that are legged into
part of the qualified hedging transaction $100 for £100.
that has not been disposed of or after March 17, 1992.
(B) Swap #2, Interest rate swap. On
otherwise terminated (that is, the December 31 of both 2013 and 2014, K will (B) The rules of paragraph (a)(6)(ii)
remaining debt instrument in its pay LIBOR times a notional principal amount and Example 11 of paragraph (a)(9)(iv)

VerDate Sep<11>2014 15:42 Sep 04, 2015 Jkt 235001 PO 00000 Frm 00044 Fmt 4700 Sfmt 4700 E:\FR\FM\08SER1.SGM 08SER1
Federal Register / Vol. 80, No. 173 / Tuesday, September 8, 2015 / Rules and Regulations 53735

of this section apply to leg-outs that § 1.988–5 [Amended] ‘‘Remove’’ column and add in its place
occur on or after September 6, 2012. ■ Par. 3. For each section listed in the the language in the ‘‘Add’’ column as set
* * * * * table, remove the language in the forth below:

Section Remove Add

§ 1.988–5(a)(9)(iv), Example 4, paragraph (i), second, third and fourth January 1, 1990 ............................. January 1, 2013.
sentences.
§ 1.988–5(a)(9)(iv), Example 4, paragraph (i), table ............................... December 31, 1990 ....................... December 31, 2013.
§ 1.988–5(a)(9)(iv), Example 4, paragraph (i), table ............................... December 31, 1991 ....................... December 31, 2014.
§ 1.988–5(a)(9)(iv), Example 4, paragraph (i), table ............................... December 31, 1992 ....................... December 31, 2015.
§ 1.988–5(a)(9)(iv), Example 4, paragraph (iii)(B) .................................. 1990 ............................................... 2013.
§ 1.988–5(a)(9)(iv), Example 4, paragraph (iii)(B) .................................. 1991 ............................................... 2014.
§ 1.988–5(a)(9)(iv), Example 4, paragraph (iii)(B) .................................. 1992 ............................................... 2015.
§ 1.988–5(a)(9)(iv), Example 4, paragraph (iii)(D), second sentence ..... 1992 ............................................... 2015.
§ 1.988–5(a)(9)(iv), Example 4, paragraph (iv), first, second, fourth, January 1, 1991 ............................. January 1, 2014.
fifth, and sixth sentences.
§ 1.988–5(a)(9)(iv), Example 4, paragraph (iv), first, fourth, and fifth January 1, 1990 ............................. January 1, 2013.
sentences.
§ 1.988–5(a)(9)(iv), Example 4, paragraph (iv), third sentence .............. 1990 ............................................... 2013.
§ 1.988–5(a)(9)(iv), Example 4, paragraph (iv), sixth and seventh sen- December 31, 1992 ....................... December 31, 2015.
tences.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (i), second, fourth, and fifth January 1, 1990 ............................. January 1, 2013.
sentences.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (i), table ............................... December 31, 1990 ....................... December 31, 2013.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (i), table ............................... December 31, 1991 ....................... December 31, 2014.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (i), table ............................... December 31, 1992 ....................... December 31, 2015.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (ii), second and third sen- January 1, 1991 ............................. January 1, 2014.
tences.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (ii), second sentence .......... January 1, 1990 ............................. January 1, 2013.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (ii), third sentence ............... December 31, 1991 ....................... December 31, 2014.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (ii), third sentence ............... December 31, 1992 ....................... December 31, 2015.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (ii), third sentence ............... 1991 ............................................... 2014.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (ii), third sentence ............... 1992 ............................................... 2015.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (iii), second sentence .......... January 1, 1990 ............................. January 1, 2013.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (iii), second sentence .......... January 1, 1991 ............................. January 1, 2014.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (iii)(B) .................................. 1990 ............................................... 2013.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (iii)(B) .................................. 1991 ............................................... 2014.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (iii)(B) .................................. 1992 ............................................... 2015.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (iii)(C), first sentence .......... 1990 ............................................... 2013.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (iii)(C), first sentence .......... 1991 ............................................... 2014.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (iii)(C), first sentence .......... 1992 ............................................... 2015.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (iii)(D), second sentence ..... 1990 ............................................... 2013.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (iv), first, second, third, and January 1, 1991 ............................. January 1, 2014.
sixth sentences.
§ 1.988–5(a)(9)(iv), Example 5, paragraph (iv), fourth sentence ............ 1990 ............................................... 2013.

§ 1.988–5T [Removed] ENVIRONMENTAL PROTECTION with the requirements of the Clean Air
AGENCY Act (the Act).
■ Par. 4. Section 1.988–5T is removed.
DATES: This rule is effective on
John Dalrymple, 40 CFR Part 52 November 9, 2015, without further
Deputy Commissioner for Services and notice, unless the EPA receives adverse
[EPA–R10–OAR–2015–0447; FRL–9933–43–
Enforcement. comment by October 8, 2015. If the EPA
Region 10]
Approved: August 25, 2015.
receives adverse comment, we will
Approval and Promulgation of State publish a timely withdrawal in the
Mark J. Mazur, Federal Register informing the public
Implementation Plans; Alaska;
Assistant Secretary of the Treasury (Tax that the rule will not take effect.
Transportation Conformity State
Policy).
Implementation Plan ADDRESSES: Submit your comments,
[FR Doc. 2015–22554 Filed 9–3–15; 4:15 pm] identified by Docket ID No. EPA–R10–
BILLING CODE 4830–01–P AGENCY: Environmental Protection OAR–2015–0447, by any of the
Agency (EPA). following methods:
ACTION: Direct final rule. • www.regulations.gov: Follow the
on-line instructions for submitting
SUMMARY: The Environmental Protection comments.
Agency (EPA) is approving a State • Email: pepple.karl@epa.gov
rmajette on DSK7SPTVN1PROD with RULES

Implementation Plan (SIP) revision • Mail: Karl Pepple, EPA Region 10,
submitted by the State of Alaska (the Office of Air, Waste and Toxics, AWT–
State). The submission addresses 150, 1200 Sixth Avenue, Suite 900,
transportation conformity and general Seattle, WA 98101
conformity requirements. The EPA is • Hand Delivery/Courier: EPA Region
approving the submission in accordance 10, 1200 Sixth Avenue, Suite 900,

VerDate Sep<11>2014 15:42 Sep 04, 2015 Jkt 235001 PO 00000 Frm 00045 Fmt 4700 Sfmt 4700 E:\FR\FM\08SER1.SGM 08SER1
Document Created: 2018-02-26 10:13:10
Document Modified: 2018-02-26 10:13:10
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Final regulations and removal of temporary regulations.
Dates		Effective Date. These regulations are effective on September 8, 2015.
Contact		Sheila Ramaswamy, at (202) 317-6938 (not a toll-free number).
FR Citation		80 FR 53732
RIN Number		1545-BK98
CFR Associated		Income Taxes and Reporting and Recordkeeping Requirements
80 FR 53732 - Integrated Hedging Transactions of Qualifying Debt

DEPARTMENT OF THE TREASURYInternal Revenue Service

Federal Register Volume 80, Issue 173 (September 8, 2015)

DEPARTMENT OF THE TREASURY
Internal Revenue Service
