Daily Tax Update - March 18, 2013: IRS and Treasury Issue Final and Temporary Regs on Stock Distributions and Stock Transfers

IRS AND TREASURY ISSUE FINAL AND TEMPORARY SECTION 367 AND SECTION 1248 REGULATIONS ON STOCK DISTRIBUTIONS AND STOCK TRANSFERS:  The IRS and Treasury have issued final and temporary regulations under sections 367 and 1248 regarding transfers of property and stock distributions by domestic corporations and indirect stock transfers in outbound asset reorganizations.

The final regulations primarily adopt, with some modifications, the proposed regulations issued in 2008 concerning section 367(a)(5).  The regulations provide guidance on the transfer of property by a domestic corporation to a foreign corporation in certain nonrecognition exchanges, or distributions of stock of foreign corporations by a domestic corporation in certain nonrecognition distributions.

The temporary regulations eliminate the section 367(a)(5) exception to the coordination rule between asset transfers and indirect stock transfers for certain outbound asset reorganizations.  The regulations also modify the section 351 exception to make the basis comparison consistent with the remaining exception to

The documents can be accessed below:

TD9614.pdf

td9615.pdf

regmarch18.pdf

MISCELLANEOUS GUIDANCE RELEASED:
Revenue Ruling 2013-9 provides various prescribed rates for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, the adjusted federal long-term tax-exempt rate. These rates are determined as prescribed by § 1274. The rates are published monthly for purposes of sections 42, 382, 412, 1288, 1274, 7520, 7872, and various other sections of the Internal Revenue Code.