SECTION 1. OVERVIEW

This notice announces that Treasury and the Internal Revenue Service (IRS) will amend the regulations under section 367(a) of the Internal Revenue Code regarding the application of Treas. Reg. § 1.367(a)–8, including the provisions addressing the treatment of gain recognition agreements as a result of certain common asset reorganizations involving the U.S. transferor, the transferee foreign corporation, and the transferred corporation. These regulations will supplement the existing rules under Treas. Reg. § 1.367(a)–8, including the rules under Treas. Reg. § 1.367(a)–8(f) through (h). As described below, taxpayers may rely on this notice for exchanges occurring on or after July 20, 1998 (the effective date of Treas. Reg. § 1.367(a)–8).

No inference is intended on the application of the current provisions of Treas. Reg. § 1.367(a)–8 to asset reorganizations, and other transactions, that are not addressed in this notice.