SECTION 9. PROPOSED COVERED

ASSET TRANSACTION SECTION 358 ANTI-AVOIDANCE RULE

.01 Purpose . The Treasury Department and the IRS anticipate that the forthcoming proposed regulations will modify the proposed two-year rule in proposed § 1.56A-4(f)(1)(ii) consistent with the guidance described in this section 9.

.02 Proposed two-year rule rebuttable presumption . For purposes of proposed § 1.56A-4(f)(1), if within two years of the date the stock of a foreign corporation is received in a covered asset transaction, the basis in such stock is taken into account, in whole or in part, in determining the AFSI of the recipient CAMT entity or another CAMT entity, the covered asset transaction would be presumed to have a principal purpose to avoid treatment of such CAMT entity as an applicable corporation or to reduce or otherwise avoid a liability under § 55(a). The presumption described in the preceding sentence may be rebutted by facts and circumstances clearly establishing that the covered asset transaction was not undertaken with such a principal purpose.

.03 Procedure for rebutting presumption . In order to rebut the proposed two-year rule rebuttable presumption described in section 9.02 of this notice, a CAMT entity that would otherwise be required to take into account the increase to AFSI under proposed § 1.56A-4(f) for the taxable year in which the stock of the foreign corporation is received must attach a statement rebutting the presumption to the Form 4626, Alternative Minimum Tax – Corporations, filed with the CAMT entity’s return for the taxable year in which the event triggering application of the proposed two-year rule (as modified by this notice) occurs. The statement must describe the facts and circumstances supporting the rebuttal and be in accordance with any procedures set forth in forms, instructions, or guidance published in the Internal Revenue Bulletin.