Section 1374 Effective Dates (IRS final rule, 2005-12-21

Official source: Federal Register (GovInfo) (https://www.govinfo.gov/content/pkg/FR-2005-12-21/pdf/05-24283.pdf), retrieved 2026-10-03. U.S. Government work (17 U.S.C. § 105).

75730 Federal Register / Vol. 70, No. 244 / Wednesday, December 21, 2005 / Rules and Regulations

official for the Technology Administration.

Classification

Executive Order 12866

This rule is not subject to E.O. 12866.

Administrative Procedure Act

This rule of agency procedure and practice is not subject to the requirement to provide prior notice and an opportunity for comment. (5 U.S.C. 553(b)(A)). The Department also finds good cause to waive prior notice and an opportunity for public comment because it is unnecessary. (5 U.S.C. 553(b)(B)). This rule amends the regulations to add the Deputy Assistant Secretary for Technology Policy as a designated official for the Technology Administration in denying requests for records under the FOIA, and requests for records and requests for correction or amendment under the PA. The addition of this individual to the list of designated officials is a procedural matter for the Department and does not affect the rights of the public. Therefore, the Department finds that it is unnecessary to provide prior notice and an opportunity for comment on this action.

The Department finds good cause to waive the 30-day delay in effectiveness because the addition of this individual to the list of designated officials is a procedural matter for the Department and does not affect the rights of the public. Therefore, the Department makes this rule effective upon publication.

Regulatory Flexibility Act

Because notice and opportunity for comment are not required pursuant to 5 U.S.C. 553 or any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) are inapplicable. Therefore, a regulatory flexibility analysis is not required and has not been prepared.

I For the reasons stated in the preamble, the Department amends appendix B to part 4, title 15 of the Code of Federal Regulations as follows:

Appendix B to Part 4—Officials Authorized to Deny Requests for Records Under the Freedom of Information Act, and Requests for Records and Requests for Correction or Amendment Under the Privacy Act

I 1. The authority citation for part 4 continues to read as follows:

Authority: 5 U.S.C. 301; 5 U.S.C. 552; 5 U.S.C. 552a; 5 U.S.C. 553; 31 U.S.C. 3717; 44 U.S.C. 3101; Reorganization Plan No. 5 of 1950.

Appendix B to 15 CFR Part 4

[Amended]

I 2. Amend Appendix B to 15 CFR Part 4 by adding the position of ‘‘Deputy Assistant Secretary for Technology Policy’’ following the ‘‘Assistant Secretary for Technology Policy’’ for the Technology Administration.

Dated: December 16, 2005. Brenda Dolan, Departmental Freedom of Information and Privacy Act Officer.

[FR Doc. 05–24295 Filed 12–16–05; 11:24 am]

BILLING CODE 3510–18–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9236]

RIN 1545–BD95

Section 1374 Effective Dates

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

SUMMARY: This document contains final regulations that provide guidance concerning the applicability of section 1374 of the Internal Revenue Code to S corporations that acquire assets in carryover basis transactions from C corporations on or after December 27, 1994, and to certain corporations that terminate S corporation status and later elect again to become S corporations.

DATES: Effective Date: These regulations are effective December 21, 2005.

Applicability Dates: Section 1.1374–8 applies to any transaction described in section 1374(d)(8) that occurs on or after December 27, 1994. Section 1.1374–10 applies for taxable years beginning after December 22, 2004.

FOR FURTHER INFORMATION CONTACT: Stephen R. Cleary, (202) 622–7750, (not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

This document contains amendments to 26 CFR Part 1. On December 22, 2004, temporary regulations (TD 9170) regarding the applicability of section 1374 to S corporations that acquire assets in certain carryover basis transactions and to certain corporations that terminate S corporation status and later elect again to become S corporations were published in the Federal Register (69 FR 76612). A notice of proposed rule making (REG–

139683–04) cross-referencing the temporary regulations was published in the Federal Register for the same day (69 FR 76635). The temporary regulations provide that (1) section 1374(d)(8) applies to any transaction described in that section that occurs on or after December 27, 1994, regardless of the date of the S corporation’s election under section 1362, and (2) for purposes of section 633(d)(8) of the Tax Reform Act of 1986, as amended by the Technical and Miscellaneous Revenue Act of 1988, a corporation’s most recent S election, not an earlier election that has been revoked or terminated, determines whether or not it is subject to current section 1374.

No comments were received responding to the notice of proposed rulemaking, and no public hearing was requested or held. The proposed regulations are adopted with no substantive change by this Treasury decision, and the corresponding temporary regulations are removed.

Special Analyses

It has been determined that this regulation is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) and (d) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to § 1.1374–8(a)(2) of these regulations. With respect to § 1.1374–10(c) of these regulations, it has been determined, pursuant to 5 U.S.C. 553(d)(3), that good cause exists to dispense with a delayed effective date. This section, which is substantively identical to currently effective temporary regulations, merely continues to provide necessary guidance to taxpayers with respect to the application of the transition rule regarding qualified corporations in section 633(d)(8) of TRA, as amended by TAMRA, and, accordingly, with respect to the application of section 1374 to asset dispositions which occur during taxable years beginning after December 22, 2004. Because § 1.1374–8(a)(2) does not impose a collection of information on small entities, it is not subject to the provisions of the Regulatory Flexibility Act (5 U.S.C. chapter 6). It is hereby certified that § 1.1374–10(c) of these regulations will not have a significant economic impact on a substantial number of small entities. This certification is based on the fact that § 1.1374–10(c) of these regulations addresses an uncommon fact situation not likely to affect a significant number of small entities. Therefore, a regulatory flexibility analysis is not required. Pursuant to section 7805(f) of the Code,

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Federal Register / Vol. 70, No. 244 / Wednesday, December 21, 2005 / Rules and Regulations 75731

such gain is subject to tax under section 1374 as amended by the Tax Reform Act of 1986 and the Technical and Miscellaneous Revenue Act of 1988.

§ 1.1374–10T [Removed]

I Par. 6. Section 1.1374–10T is removed.

Approved: December 9, 2005. Mark E. Matthews, Deputy Commissioner for Services and Enforcement. Eric Solomon, Acting Deputy Assistant Secretary of the Treasury (Tax Policy).

[FR Doc. 05–24283 Filed 12–20–05; 8:45 am]

BILLING CODE 4820–01–P 3

DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Chapter I and

46 CFR Chapter I

[USCG–2005–23172]

RIN 1625–ZA06

Marine Safety Center Address Change

AGENCY: Coast Guard, DHS.

ACTION: Technical amendment.

SUMMARY: This technical amendment makes non-substantive changes throughout chapters I of title 33 and title 46 of the Code of Federal Regulations. The purpose of this amendment is to change the address of the United States Coast Guard Marine Safety Center as it appears in Coast Guard regulations. This rule will have no substantive effect on the regulated public.

DATES: These changes are effective December 21, 2005. We will accept comments on this technical amendment through February 21, 2006.

ADDRESSES: You may submit comments identified by Coast Guard docket number USCG–2005–23172 to the Docket Management Facility at the U.S. Department of Transportation. To avoid duplication, please use only one of the following methods:

(1) Web Site: http://dms.dot.gov. (2) Mail: Docket Management Facility, U.S. Department of Transportation, 400 Seventh Street, SW., Washington, DC 20590–0001. (3) Fax: 202–493–2251. (4) Delivery: Room PL–401 on the Plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

the notice of proposed rulemaking preceding these final regulations 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 Stephen R. Cleary of the Office of Associate Chief Counsel (Corporate). Other personnel from Treasury and the IRS participated in their development.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

I Accordingly, 26 CFR part 1 is amended as follows:

PART 1—INCOME TAXES

I Paragraph 1. The authority citation for part 1 is amended by adding entries in numerical order to read, in part, as follows:

Authority: 26 U.S.C. 7805 * - Section 1.1374–8 also issued under 26 U.S.C 337(d) and 1374(e).* - Section 1.1374–10 also issued under 26 U.S.C. 337(d) and 1374(e).* -

I Par. 2. Section 1.1374–0 is amended by revising the entries for § 1.1374–8 and adding an entry for § 1.1374–10(c) to read as follows:

§ 1.1374–0 Table of contents.

§ 1.1374–8 Section 1374(d)(8) transactions. (a) In general. (b) Effective date of section 1374(d)(8). (c) Separate determination of tax. (d) Taxable income limitation. (e) Examples.

§ 1.1374–10 Effective date and additional rules.

- - - (c) Revocation and re-election of S corporation status.

(1) In general. (2) Example.

I Par. 3. Section 1.1374–8 is amended by: I 1. Redesignating paragraphs (b), (c), and (d) as paragraphs (c), (d), and (e), respectively. I 2. Revising paragraph (a). I 3. Adding new paragraph (b).

The revision and addition read as follows:

§ 1.1374–8 Section 1374(d)(8) transactions. (a) In general. If any S corporation acquires any asset in a transaction in which the S corporation’s basis in the asset is determined (in whole or in part) by reference to a C corporation’s basis in the assets (or any other property) (a section 1374(d)(8) transaction), section 1374 applies to the net recognized builtin gain attributable to the assets acquired in any section 1374(d)(8) transaction.

(b) Effective date of section 1374(d)(8). Section 1374(d)(8) applies to any section 1374(d)(8) transaction, as defined in paragraph (a)(1) of this section, that occurs on or after December 27, 1994, without regard to the date of the corporation’s election to be an S corporation under section 1362.

§ 1.1374–8T [Removed]

I Par. 4. Section 1.1374–8T is removed.

I Par. 5. Section 1.1374–10 is amended by revising paragraph (c) to read as follows:

§ 1.1374–10 Effective date and additional rules.

- - - (c) Termination and re-election of S corporation status —(1) In general. For purposes of section 633(d)(8) of the Tax Reform Act of 1986, as amended, any reference to an election to be an S corporation under section 1362 shall be treated as a reference to the corporation’s most recent election to be an S corporation under section 1362. This paragraph (c) applies for taxable years beginning after December 22, 2004, without regard to the date of the corporation’s most recent election to be an S corporation under section 1362.

(2) Example. The following example illustrates the rules of this paragraph (c):

Example. (i) Effective January 1, 1988, X, a C corporation that is a qualified corporation under section 633(d) of the Tax Reform Act of 1986, as amended, elects to be an S corporation under section 1362. Effective January 1, 1990, X revokes its S status and becomes a C corporation. On January 1, 2004, X again elects to be an S corporation under section 1362. X disposes of assets in 2006, 2007, and 2008, recognizing gain. (ii) X is not eligible for treatment under the transition rule of section 633(d)(8) of the Tax Reform Act of 1986, as amended, with respect to these assets. Accordingly, X is subject to section 1374, as amended by the Tax Reform Act of 1986 and the Technical and Miscellaneous Revenue Act of 1988, and the 10-year recognition period begins on January 1, 2004.

(iii) To the extent the gain that X recognizes on the asset sales in 2006, 2007, and 2008 reflects built-in gain inherent in such assets in X’s hands on January 1, 2004,

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