SECTION 1. OVERVIEW

This notice announces that the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) intend to issue regulations under section 721(c) to ensure that, when a U.S. person transfers certain property to a partnership that has foreign partners related to the transferor, income or gain attributable to the property will be taken into account by the transferor either immediately or periodically. This notice also announces that the Treasury Department and the IRS intend to issue regulations under sections 482 and 6662 applicable to controlled transactions involving partnerships to ensure the appropriate valuation of such transactions.

Section 2 of this notice provides relevant background. Section 3 of this notice outlines the reasons the Treasury Department and the IRS intend to exercise their regulatory authority to issue the regulations described in this notice. Section 4 of this notice describes regulations that the Treasury Department and the IRS intend to issue under section 721(c) that will override the general nonrecognition treatment provided by section 721(a) unless certain conditions are satisfied. Section 5 of this notice describes regulations that the Treasury Department and the IRS intend to issue that will address the application of sections 482 and 6662 to controlled transactions involving partnerships. Section 6 of this notice provides the effective dates of the regulations described in this notice. Section 7 of this notice requests comments and provides contact information for purposes of submitting comments.