SECTION 1. PURPOSES

This notice announces that the Department of the Treasury (the “Treasury Department”) and the Internal Revenue Service (the “IRS”) intend to issue proposed regulations under sections 897(d) and (e) that modify the application of the rules described in §§1.897-5T and 1.897-6T, Notice 89-85, 1989-2 C.B. 403, and Notice 2006-46, 2006-1 C.B. 1044, to certain transactions involving the transfer of United States real property interests (“USRPIs”). The regulations will propose to revise the rules that apply to inbound asset reorganizations under section 368(a)(1)(F) that constitute a “covered inbound F reorganization” as defined in section 3.02 of this notice.

This notice also announces that the Treasury Department and the IRS intend to issue proposed regulations to revise §1.368-2(m) to clarify that qualification of a potential F reorganization (as defined in §1.368-2(m)(1)) as a reorganization under section 368(a)(1)(F) (“F reorganization”) would not be affected by a disposition of stock in either the transferor corporation or the resulting corporation if that disposition is not included in the plan of reorganization.