Treasury decision adopting these rules as Par. 5. Section 1.338–5 is amended 2008 (73 FR 42522) relating to the averag-
final regulations in the Federal Register. by revising the first sentence in paragraph ing of farm and fishing income in comput-
Par. 3. Section 1.338–0 is amended (d)(3)(ii) and by adding a new paragraph ing income tax liability.
by adding entries for §§1.338–1(e) and (h) to read as follows:
1.338–5(h) to read as follows: FOR FURTHER INFORMATION
§1.338–5. Adjusted grossed-up basis. CONTACT: Amy Pfalzgraf, (202)
§1.338–0. Outline of topics. 622–4960 (not a toll-free number).
***** (d) * * * SUPPLEMENTARY INFORMATION:
(3) * * *
§1.338–1 General principles; status of old (ii) Basis amount. The basis amount is Background
target and new target. equal to the amount determined by apply- The final and temporary regulations
ing paragraphs (c)(1) and (2) of this section (T.D. 9417) that are the subject of this
***** (the purchasing corporation’s grossed-up
(e) Effective/applicability date. correction are under section 1301 of the
basis in recently purchased target stock at Internal Revenue Code.
***** the beginning of the day after the acqui-
sition date determined without regard to Need for Correction
§1.338–5 Adjusted grossed-up basis. the acquisition costs taken into account in
paragraph (c)(3) of this section) multiplied As published, T.D. 9417 contains an er-
***** by a fraction the numerator of which is the ror that may prove to be misleading and is
(h) Effective/applicability date. percentage of target stock (by value, de- in need of clarification.
Par. 4. Section 1.338–1 is amended by termined on the acquisition date) attribut-
adding two new sentences after the paren- able to the purchasing corporation’s non- Correction of Publication
thetical that follows the third sentence of recently purchased target stock and the de-
paragraph (a)(1), by revising the first sen- Accordingly, the publication of the
nominator of which is 100 percent minus final and temporary regulations (T.D.
tence in paragraph (c)(1), and adding a new the numerator amount. * * *
paragraph (e) to read as follows: 9417), which were the subject of FR. Doc.
***** E8–16665, is corrected as follows:
§1.338–1. General principles; status of (h) Effective/applicability date. Para- On page 42522, column 2, in the pre-
old target and new target. graph (d)(3)(ii) of this section is applica- amble, under the caption “For Further In-
ble to any qualified stock disposition for formation Contact”, line 2, the language
(a) * * * which the disposition date is on or after “Amy Pfalzgraf, (202) 622–4950 (not a”
(1) * * * However, if, as a result of the date of publication of the Treasury de- is corrected to read “Amy Pfalzgraf (202)
the deemed purchase of old target’s as- cision adopting these rules as final regula- 622–4960 (not a”.
sets pursuant to a section 336(e) election, tions in the Federal Register.
there would be both a qualified stock pur- LaNita Van Dyke,
chase and a qualified stock disposition of Linda E. Stiff, Chief, Publications and
the stock of a subsidiary of the target, nei- Deputy Commissioner for Regulations Branch,
ther a section 338(g) election nor a section Services and Enforcement. Legal Processing Division,
338(h)(10) election may be made with re- Associate Chief Counsel
(Filed by the Office of the Federal Register on August 22, (Procedure and Administration).
spect to the qualified stock purchase of the 2008, 8:45 a.m., and published in the issue of the Federal
subsidiary. Instead, a section 336(e) elec- Register for August 25, 2008, 73