SECTION 4. RELIANCE ON RULES

DESCRIBED IN THIS NOTICE

A taxpayer may rely on the rules described in section 3 of this notice for transactions completed on or before the date proposed regulations governing the basis consequences of covered inbound transactions are published in the Federal Register, provided the taxpayer and its related parties (within the meaning of sections 267(b) and 707(b)(1)) follow the

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rules in their entirety and in a consistent manner.

No inference is intended with regard to the treatment of section 961(c) basis as a result of transactions other than covered inbound transactions. The Treasury Department and the IRS will consider in future guidance the extent to which basis provided under section 961(c) in stock of a CFC may be taken into account as adjusted basis by a domestic corporation that acquires stock of the CFC in a transaction other than a covered inbound transaction.

A taxpayer relying on this notice that has maintained section 961(c) basis in a currency that is not the U.S. dollar must, before applying the rules described in section 3 of this notice, translate section 961(c) basis into U.S. dollars, under a reasonable method consistently applied to all acquired CFCs in any covered inbound transaction undertaken by one or more domestic acquiring corporations. For this purpose, a reasonable method must use an exchange rate that reflects the original U.S. dollar inclusion amounts of the United States shareholder that gave rise to the section 961(c) basis, reduced as appropriate, including to take into account distributions of PTEP on such stock. Moreover, distributions of PTEP are treated as reducing the section 961(c) basis as so translated by the U.S. dollar basis of the PTEP.