81_FR_95720 81 FR 95471 - United States Property Held by Controlled Foreign Corporations in Transactions Involving Partnerships; Rents and Royalties Derived in the Active Conduct of a Trade or Business; Correction

81 FR 95471 - United States Property Held by Controlled Foreign Corporations in Transactions Involving Partnerships; Rents and Royalties Derived in the Active Conduct of a Trade or Business; Correction

DEPARTMENT OF THE TREASURY
Internal Revenue Service

Federal Register Volume 81, Issue 249 (December 28, 2016)

Page Range95471-95472
FR Document2016-31411

This document contains corrections to the final regulations (TD 9792) that were published in the Federal Register on Thursday, November 3, 2016 (81 FR 76497). The final regulations provide rules regarding the treatment as United States property of property held by a controlled foreign corporation (CFC) in connection with certain transactions involving partnerships.

Federal Register, Volume 81 Issue 249 (Wednesday, December 28, 2016) 
[Federal Register Volume 81, Number 249 (Wednesday, December 28, 2016)]
[Rules and Regulations]
[Pages 95471-95472]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-31411]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9792]
RIN 1545-BJ48


United States Property Held by Controlled Foreign Corporations in 
Transactions Involving Partnerships; Rents and Royalties Derived in the 
Active Conduct of a Trade or Business; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

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SUMMARY: This document contains corrections to the final regulations 
(TD 9792) that were published in the Federal Register on Thursday, 
November 3, 2016 (81 FR 76497). The final regulations provide rules 
regarding the treatment as United States property of property held by a 
controlled foreign corporation (CFC) in connection with certain 
transactions involving partnerships.

DATES: This correction is effective December 28, 2016 and is applicable 
on or after November 3, 2016.

FOR FURTHER INFORMATION CONTACT: Rose E. Jenkins, at (202) 317-6934 
(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    The final regulations (TD 9792) that are the subject of these 
corrections are under sections 954 and 956 of the Internal Revenue 
Code.

Need for Correction

    As published, the final regulations (TD 9792) 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.

Amendments to the Regulations

    Accordingly, 26 CFR part 1 is corrected by making the following 
correcting amendments:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 is amended by deleting 
the entry for Sec.  1.956-3T to read in part as follows:

    Authority: 26 U.S.C. 7805 * * *
* * * * *


Sec.  1.954-2  [Amended]

0
Par. 2. Section 1.954-2 is amended by removing paragraph (j).

0
Par. 3. Section 1.956-1T is amended by revising the section heading and 
the paragraph headings for paragraphs (a)(5) and (f) to read as 
follows:


Sec.  1.956-1T  Shareholder's pro rata share of the average of the 
amounts of United States property held by a controlled foreign 
corporation (temporary).

    (a) * * *
    (5) Exclusion for certain recourse obligations. * * *
* * * * *
    (f) Effective/applicability date. * * *
* * * * *

0
Par. 4. Section 1.956-4 is amended by revising paragraphs (b)(2)(ii), 
(b)(3) introductory text, and (c)(3)(i) introductory text, and in 
paragraph (c)(4), Example 3, by removing ``U.S.C.'' each place that it 
appears and adding in its place, ``USP2''.
    The revisions read as follows:


Sec.  1.956-4  Certain rules applicable to partnerships.

* * * * *
    (b) * * *
    (2) * * *
    (ii) Special allocations. For purposes of paragraph (b)(1) of this 
section, if a partnership agreement provides for the allocation of book 
income (or, where appropriate, book gain) from a subset of the property 
of the partnership to a partner other than in accordance with the 
partner's liquidation value percentage in a particular taxable year (a 
special allocation), then the partner's attributable share of that 
property is determined solely by reference to the partner's special 
allocation with respect to the property, provided the special 
allocation will be respected for federal income tax purposes under 
section 704(b) and the regulations thereunder and does not have a 
principal purpose of avoiding the purposes of section 956.
    (3) Examples. The following examples illustrate the rules of this 
paragraph (b): * * *
* * * * *
    (c) * * *
    (3) * * *
    (i) General rule. For purposes of determining a partner's share of 
a foreign partnership's obligation under section 956, if the foreign 
partnership distributes an amount of money or property to a partner 
that is related to a controlled foreign corporation within the meaning 
of section 954(d)(3) and whose obligation would be United States 
property if held (or if treated as held) by the controlled foreign

[[Page 95472]]

corporation, and the foreign partnership would not have made the 
distribution but for a funding of the partnership through an obligation 
held (or treated as held) by the controlled foreign corporation, 
notwithstanding Sec.  1.956-1(e), the partner's share of the 
partnership obligation is the greater of--
* * * * *

Martin V. Franks,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel (Procedure and Administration).
[FR Doc. 2016-31411 Filed 12-27-16; 8:45 am]
BILLING CODE 4830-01-P

Federal Register / Vol. 81, No. 249 / Wednesday, December 28, 2016 / Rules and Regulations 95471 under sections 954 and 956 of the DEPARTMENT OF THE TREASURY § 1.954–2 [Amended] Internal Revenue Code. ■ Par. 2. Section 1.954–2 is amended by Internal Revenue Service removing paragraph (j). Need for Correction ■ Par. 3. Section 1.956–1T is amended As published, the final regulations 26 CFR Part 1 by revising the section heading and the (TD 9792) contain errors that may prove [TD 9792] paragraph headings for paragraphs (a)(5) to be misleading and are in need of and (f) to read as follows: clarification. RIN 1545–BJ48 § 1.956–1T Shareholder’s pro rata share of Correction of Publication United States Property Held by the average of the amounts of United States Controlled Foreign Corporations in property held by a controlled foreign Accordingly, the final regulations (TD Transactions Involving Partnerships; corporation (temporary). 9792), that are the subject of FR Doc. Rents and Royalties Derived in the (a) * * * 2016–26425, are corrected as follows: Active Conduct of a Trade or (5) Exclusion for certain recourse 1. On page 76499, third column, in Business; Correction obligations. * * * the preamble, the eighth line from the * * * * * AGENCY: Internal Revenue Service (IRS), (f) Effective/applicability date. * * * bottom of the last paragraph, the Treasury. language ‘‘generally is consistent with * * * * * § 1.956–’’ is corrected to read ‘‘generally ACTION: Correcting amendment. ■ Par. 4. Section 1.956–4 is amended by is consistent with existing § 1.956–’’. SUMMARY: This document contains revising paragraphs (b)(2)(ii), (b)(3) 2. On page 76500, first column, in the corrections to the final regulations (TD introductory text, and (c)(3)(i) preamble, the fourth line from the top 9792) that were published in the introductory text, and in paragraph of the page, the language ‘‘that is not Federal Register on Thursday, (c)(4), Example 3, by removing ‘‘U.S.C.’’ included in the final or’’ is corrected to November 3, 2016 (81 FR 76497). The each place that it appears and adding in read ‘‘that is not included in the existing final regulations provide rules regarding its place, ‘‘USP2’’. final or’’. the treatment as United States property The revisions read as follows: of property held by a controlled foreign § 1.956–4 Certain rules applicable to 3. On page 76500, first column, in the corporation (CFC) in connection with partnerships. preamble, the seventh line in the first certain transactions involving * * * * * full paragraph, the language ‘‘§ 1.956– partnerships. 2(a)(3) nor proposed § 1.956–’’ is (b) * * * corrected to read ‘‘existing § 1.956– DATES: This correction is effective (2) * * * 2(a)(3) nor proposed § 1.956–’’. December 28, 2016 and is applicable on (ii) Special allocations. For purposes or after November 3, 2016. of paragraph (b)(1) of this section, if a 4. On page 76500, first column, in the partnership agreement provides for the FOR FURTHER INFORMATION CONTACT: Rose preamble, the eighth line in the first full allocation of book income (or, where E. Jenkins, at (202) 317–6934 (not a toll- paragraph, the language ‘‘4(b) include appropriate, book gain) from a subset of free number). the limitation. A comment’’ is corrected the property of the partnership to a SUPPLEMENTARY INFORMATION: to read ‘‘4(b) includes the limitation. A partner other than in accordance with comment’’. Background the partner’s liquidation value 5. On page 76500, third column, in The final regulations (TD 9792) that percentage in a particular taxable year (a the preamble, the eleventh line from the are the subject of these corrections are special allocation), then the partner’s top of the first full paragraph, the under sections 954 and 956 of the attributable share of that property is language is corrected to read ‘‘book-up’’. Internal Revenue Code. determined solely by reference to the partner’s special allocation with respect 6. On page 76501, first column, in the Need for Correction to the property, provided the special preamble, the eighth line of the first full allocation will be respected for federal As published, the final regulations paragraph, the language is corrected to income tax purposes under section (TD 9792) contain errors that may prove read ‘‘§ 1.956–4(b)(2)(ii)’’. 704(b) and the regulations thereunder to be misleading and are in need of Martin V. Franks, clarification. and does not have a principal purpose of avoiding the purposes of section 956. Chief, Publications and Regulations Branch, List of Subjects in 26 CFR Part 1 Legal Processing Division, Associate Chief (3) Examples. The following examples Counsel, (Procedure and Administration). Income taxes, Reporting and illustrate the rules of this paragraph (b): recordkeeping requirements. *** [FR Doc. 2016–31364 Filed 12–27–16; 8:45 am] Amendments to the Regulations * * * * * BILLING CODE 4830–01–P (c) * * * Accordingly, 26 CFR part 1 is (3) * * * corrected by making the following (i) General rule. For purposes of correcting amendments: determining a partner’s share of a foreign partnership’s obligation under PART 1—INCOME TAXES section 956, if the foreign partnership sradovich on DSK3GMQ082PROD with RULES distributes an amount of money or ■ Paragraph 1. The authority citation property to a partner that is related to for part 1 is amended by deleting the a controlled foreign corporation within entry for § 1.956–3T to read in part as the meaning of section 954(d)(3) and follows: whose obligation would be United Authority: 26 U.S.C. 7805 * * * States property if held (or if treated as * * * * * held) by the controlled foreign VerDate Sep<11>2014 16:15 Dec 27, 2016 Jkt 241001 PO 00000 Frm 00075 Fmt 4700 Sfmt 4700 E:\FR\FM\28DER1.SGM 28DER1

95472 Federal Register / Vol. 81, No. 249 / Wednesday, December 28, 2016 / Rules and Regulations corporation, and the foreign partnership ACTION: Final rule. information is not publicly available, would not have made the distribution e.g., confidential business information but for a funding of the partnership SUMMARY: The Environmental Protection or other information whose disclosure is through an obligation held (or treated as Agency (EPA) is taking final action to restricted by statute. Certain other held) by the controlled foreign approve revisions to the South Coast Air material, such as copyrighted material, corporation, notwithstanding § 1.956– Quality Management District is not placed on the Internet and will be 1(e), the partner’s share of the (SCAQMD) portion of the California publicly available only in hard copy partnership obligation is the greater of— State Implementation Plan (SIP). These form. Publicly available docket revisions concern emissions of oxides of materials are available through http:// * * * * * nitrogen (NOX) from ovens, dryers, www.regulations.gov, or please contact Martin V. Franks, dehydrators, heaters, kilns, calciners, the person identified in the FOR FURTHER Chief, Publications and Regulations Branch, furnaces, crematories, incinerators, INFORMATION CONTACT section for Legal Processing Division, Associate Chief heated pots, cookers, roasters, smokers, additional availability information. Counsel (Procedure and Administration). fryers, closed and open heated tanks FOR FURTHER INFORMATION CONTACT: [FR Doc. 2016–31411 Filed 12–27–16; 8:45 am] and evaporators, distillation units, afterburners, degassing units, vapor Nicole Law, EPA Region IX, (415) 947– BILLING CODE 4830–01–P incinerators, catalytic or thermal 4126, Law.nicole@epa.gov. oxidizers, soil and water remediation SUPPLEMENTARY INFORMATION: units, and other combustion equipment. Throughout this document, ‘‘we,’’ ‘‘us’’ ENVIRONMENTAL PROTECTION and ‘‘our’’ refer to the EPA. We are finalizing our approval of local AGENCY rules that regulate these emission Table of Contents 40 CFR Part 52 sources under the Clean Air Act (CAA or the Act). I. Proposed Action [EPA–R09–OAR–2016–0444; FRL–9955–94– II. Public Comments and EPA Responses DATES: These rules will be effective on Region 9] III. EPA Action January 27, 2017. IV. Incorporation by Reference ADDRESSES: The EPA has established a V. Statutory and Executive Order Reviews Approval of California Air Plan Revisions, South Coast Air Quality docket for this action under Docket ID I. Proposed Action Management District No. EPA–R09–OAR–2016–0444. All documents in the docket are listed on On September 16, 2016, the EPA AGENCY: Environmental Protection the http://www.regulations.gov Web proposed to approve the following rules Agency (EPA). site. Although listed in the index, some into the California SIP. 81 FR 63732. Adopted/ Local agency Rule No. Rule title amended/ Submitted revised SCAQMD ....... 1147 NOx Reductions from Miscellaneous Sources ................................................ 09/09/2011 02/06/2013 SCAQMD ....... 1153.1 Emissions of Oxides of Nitrogen from Commercial Food Ovens ................... 09/07/2014 04/07/2015 We proposed to approve these rules recommendation for ‘‘a testing schedule schedule were implemented for the because we determined that they that is less strict for the small emission smaller units, it is unclear what would complied with the relevant CAA burners compared to the larger ones.’’ be tested, since the exempted units do requirements. Our proposed action Response: The EPA appreciates the not have emissions limits in the rule to contains more information on the rules comment letter’s general support of our comply with. As noted above, the and our evaluation. approval of Rule 1153.1. The exemption comment letter generally supports our discussed in the comment is found in approval of Rule 1153.1 and does not II. Public Comments and EPA section (g)(2) of Rule 1153.1. Sections request or recommend any specific Responses (g)(2)(A)–(g)(2)(E) of Rule 1153.1 changes to our proposed action. The The EPA’s proposed action provided describe the documentation required of comment letter recognizes that Rule a 30-day public comment period. During units with daily NOX emissions of 1 1153.1 will decrease NOX emissions. this period, we received one comment pound per day or less. These For these reasons, the EPA is finalizing regarding EPA’s proposed approval of requirements ensure the exempted units its proposed approval of Rule 1153.1 Rule 1153.1 that was submitted are rated at a heat input capacity of less without change based on the comment. anonymously. than 325,000 BTU per hour, comply Comment: The comment generally with a permit condition limiting NOX III. EPA Action supports EPA’s proposal to approve emissions to 1 pound per day or less, No comments were submitted that Rule 1153.1. The commenter and keep daily records of unit operation change our assessment of the rules as acknowledges Rule 1153.1 was designed and fuel gas consumption. Because of described in our proposed action. to address delays in emission reduction these requirements, we disagree that the Therefore, as authorized in section technology development. However, the enforcing agency would not know about 110(k)(3) of the Act, the EPA is fully comment letter expressed a concern these units. The rule exempts these approving these rules into the California sradovich on DSK3GMQ082PROD with RULES regarding the exemption for units with units from requirements to comply with SIP. daily NOX emissions of 1 pound per day the limits for larger units and testing or less. The commenter states, ‘‘burners requirements associated with those IV. Incorporation by Reference could be replaced with larger emission units. The testing required is used to In this rule, the EPA is finalizing burners and it could easily go unknown confirm compliance with the limits in regulatory text that includes by the enforcing agency.’’ Additionally, Table 1 of the rule. If the commenter’s incorporation by reference. In the commenter makes a recommendation for a less strict testing accordance with requirements of 1 CFR VerDate Sep<11>2014 16:15 Dec 27, 2016 Jkt 241001 PO 00000 Frm 00076 Fmt 4700 Sfmt 4700 E:\FR\FM\28DER1.SGM 28DER1


Document Created: 2016-12-28 02:17:09
Document Modified: 2016-12-28 02:17:09
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionCorrecting amendment.
DatesThis correction is effective December 28, 2016 and is applicable on or after November 3, 2016.
ContactRose E. Jenkins, at (202) 317-6934 (not a toll-free number).
FR Citation81 FR 95471 
RIN Number1545-BJ48
CFR AssociatedIncome Taxes and Reporting and Recordkeeping Requirements
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