Final regulations under section 704 of the Code clarify that where certain look-through entities (or members of a consolidated group) are partners in a partnership, the tax attributes of the owners of the look-through entities must be taken into account when testing whether the economic effect of an allocation is substantial within the meaning of section 704(b). Through an example, the final regulations also reiterate the effect of other provisions, such as section 482, upon the tax treatment of a partner with respect to the partner’s distributive share under section 704(b).

Final, temporary, and proposed regulations under section 367 of the Code implement the rules announced in Notices 2006-85, 2006-2 C.B. 677, and 2007-48, 2007-25 I.R.B. 1428. The notices announced that Treasury and the IRS would issue regulations under section 367(b) to address transactions where either a parent corporation (P) or its subsidiary (S) (or both) are foreign, and the corporations seek to avoid treating as a distribution the amount of property that S transfers to P or P’s shareholders in exchange for P stock, which S then uses to acquire the stock or assets of another corporation (T) in a triangular reorganization. Notices 2006-85 and 2007-48 obsoleted by T.D. 9400.

Final, temporary, and proposed regulations under section 367 of the Code implement the rules announced in Notices 2006-85, 2006-2 C.B. 677, and 2007-48, 2007-25 I.R.B. 1428. The notices announced that Treasury and the IRS would issue regulations under section 367(b) to address transactions where either a parent corporation (P) or its subsidiary (S) (or both) are foreign, and the corporations seek to avoid treating as a distribution the amount of property that S transfers to P or P’s shareholders in exchange for P stock, which S then uses to acquire the stock or assets of another corporation (T) in a triangular reorganization. Notices 2006-85 and 2007-48 obsoleted by T.D. 9400.