Differences between liquidating and nonliquidating distribution
Section 1.1502-19T applies to adjustments and determinations of basis of (including an excess loss account in) the stock of a member occurring on or after January 23, 2006.The applicability of §1.1502-19T will expire on January 23, 2009.Temporary and proposed regulations under section 1502 of the Code provide additional guidance on the treatment of an excess loss account when a consolidated group member’s original shares have an excess loss account or the member would otherwise determine that new shares would have an excess loss account at the time of a basis adjustment or determination under the Internal Revenue Code. This notice invites public comments on certain distributions treated as sales or exchanges under section 751(b) of the Code. This notice announces that the IRS and Treasury intend to issue final regulations under section 1503(d) of the Code to provide that a reasonable cause standard similar to proposed regulations section 1.1503(d)-1(c)(1) will apply to cure all late filings under section 1503(d).The last Bulletin for each month includes a cumulative index for the matters published during the preceding months.These monthly indexes are cumulated on a semiannual basis, and are published in the last Bulletin of each semiannual period.It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application of the tax laws, including all rulings that supersede, revoke, modify, or amend any of those previously published in the Bulletin.All published rulings apply retroactively unless otherwise indicated.
Revenue rulings represent the conclusions of the Service on the application of the law to the pivotal facts stated in the revenue ruling.Section 358(a)(1) of the Internal Revenue Code (Code) generally provides that the basis of property received pursuant to an exchange to which section 351, 354, 355, 356, or 361 applies is the same as that of the property exchanged, decreased by the fair market value of any other property (except money) received by the taxpayer, the amount of any money received by the taxpayer, and the amount of loss to the taxpayer which was recognized on such exchange, and increased by the amount which was treated as a dividend, and the amount of gain to the taxpayer which was recognized on such exchange (not including any portion of such gain which was treated as a dividend).Section 358(b)(1) provides that, under regulations prescribed by the Secretary, the basis determined under section 358(a)(1) must be allocated among the properties received in the exchange or distribution.Such designation, however, must be consistent with the terms of the exchange or distribution and must be made on or before the first date on which the basis of a share or security received is relevant, for example, the date on which a share or security received is sold, or is transferred in an exchange described in section 351 or section 721 or a reorganization described in section 368.No public hearing regarding the proposed regulations was requested or held.