Part I. Rulings and Decisions Under the Internal Revenue Code
Section 103.—Interest on Section 1058.—Transfers and relief for inadvertently terminated or
State and Local Bonds of Securities Under Certain invalid qualified subchapter S subsidiary
Agreements (QSub) elections. The final regulations af-
A notice amends and supplements Notice
fect S corporations and their shareholders.
2008–41, 2008–15 I.R.B. 742 (April 14, 2008), by: This revenue procedure provides guidance with re-
(1) providing that the Treasury Department and the spect to the application of § 1058(a) of the Internal DATES: Effective Date: These regulations
IRS will treat a tax-exempt “qualified tender bond” Revenue Code to situations in which securities are
(as defined in Notice 2008–41) or “tax-exempt com-
are effective on August 14, 2008.
originally transferred pursuant to an agreement that
mercial paper” (as defined in § 2 of this notice) meets the requirements of § 1058(b), the transferee
Applicability Dates: For dates of
that is purchased by its “governmental issuer” (as subsequently defaults under the agreement as a direct applicability, see §§1.1361–4(a)(9)(ii),
defined in Notice 2008–41) on a temporary basis as or indirect result of its bankruptcy (or the bankruptcy 1.1361–6, 1.1362–4(g) and 1.1366–5.
continuing in effect without resulting in a reissuance of an affiliate), and as soon as is commercially prac-
or retirement of the purchased tax-exempt bond if ticable (but in no event more than 30 days following FOR FURTHER INFORMATION
the governmental issuer holds the bond until not the default), the transferor applies collateral provided CONTACT: Charles J. Langley, Jr., (202)
later than December 31, 2009; and (2) extending the pursuant to the agreement to the purchase of identical 622–3060 (not a toll-free number).
final date for the purchase of bonds pursuant to a securities. See Rev. Proc. 2008-63, page 946.
qualified tender right, and the final date on which SUPPLEMENTARY INFORMATION:
covered waivers of interest rate caps are disregarded,
to December 31, 2009. See Notice 2008-88, page Section 1361.—S Corpo- Paperwork Reduction Act
933. ration Defined
The collection of information con-
26 CFR 1.1361–1: S corporation defined.
Section 336.—Gain or Loss tained in these final regulations has been
Recognized on Property T.D. 9422 reviewed and approved by the Office of
Distributed in Complete Management and Budget for review in
Liquidation DEPARTMENT OF THE accordance with the Paperwork Reduction
Act of 1995 (44 U.S.C. 3507(d)) under
26 CFR 1.336–1: General principles, nomenclature,
TREASURY control number 1545–2114.
and definitions for a section 336(e) election. Internal Revenue Service The collection of information is re-
26 CFR Part 1 and 602 quired by §1.1361–1(m)(2)(ii)(A) of these
A proposed rule states that if as a result of the
deemed purchase of a corporation’s assets pursuant
final regulations. This information is re-
to a section 336(e) election, there would be both a
S Corporation Guidance Under quired to enable the IRS to verify whether
qualified stock purchase and a qualified stock dis- AJCA of 2004 and GOZA of the corporation is an eligible S corpora-
position of the stock of a subsidiary of that corpo- 2005 tion.
ration, only an election under a section 336(e) elec- An agency may not conduct or sponsor,
tion may be made with respect to the purchase. See AGENCY: Internal Revenue Service and a person is not required to respond to, a
REG-143544-04, page 947.
(IRS), Treasury. collection of information unless it displays
a valid control number.
Section 338.—Certain ACTION: Final regulations. Books or records relating to a collection
Stock Purchases Treated SUMMARY: This document contains
of information must be retained as long
as Asset Acquisitions final regulations that provide guidance
as their contents might become material in
the administration of any internal revenue
26 CFR 1.338–1: General principles; status of old regarding certain changes made to the
law. Generally, tax returns and tax return
target and new target. rules governing S corporations under the
26 CFR 1.338–5: Adjusted grossed-up basis.
information are confidential, as required