REG-147144-06 Section 1.367(a)-8 Revisions; (T.D. 9446) Gain Recognition Agreements with Respect to Certain Transfers of Stock or Securities by United States Persons to Foreign Corporations.
ICR 201202-1545-007 · OMB 1545-2056 · Historical Active
REG-147144-06 Section 1.367(a)-8 Revisions; (T.D. 9446) Gain Recognition Agreements with Respect to Certain Transfers of Stock or Securities by United States Persons to Foreign Corporations.
No material or nonsubstantive change to a currently approved collection
These regulations under IRC § 367(a) provide rules for taxpayers to avoid recognizing gain under a gain recognition agreement (GRA) if a new GRA and notice statement are filed. The regulations also provide a rule under which a taxpayer may reduce the basis in certain stock to meet one of the requirements for terminating a GRA. These regulations also revise an existing rule to facilitate electronic filing. The revision requires that information that a taxpayer currently would write on the face of its Federal income tax return shall instead be attached as a separate schedule to its return
US Code:
26 USC 367(a)
Name of Law: Transfers of property from the United States.
Section 367(a) provides that gain must be recognized when a U.S. person (U.S. transferor) transfers property to a foreign corporation in certain subchapter C nonrecognition provisions (e.g., sections 351, 361). One exception to this general rule is afforded to a U.S. transferor who transfers stock or securities (transferred corporation) to a foreign corporation (transferee foreign corporation) and who enters into a gain recognition agreement (GRA). The terms of the GRA provide that the U.S. transferor will recognize gain if within five years of the initial transfer, certain events (triggering events) occur, such as a sale of the transferred stock by the transferee foreign corporation. Treas. Reg. § 1.367(a)-8 provides rules for how U.S. transferors enter into GRAs and also provides exceptions to certain triggering events.
Temporary regulation §1.367(a)-9T provides that transactions described in section 304 (section 304 sales) are not subject to section 367(a), except where the transferor reduces its basis in stock of the foreign transferee which it held prior to the section 304 sale. In such situations, the transferor is not eligible to enter into a GRA with respect to the transferred stock.
The notice will provide that section 367(a) now applies in full to all section 304 sales. As a result, U.S. transferors of stock to a foreign corporation may enter into a GRA with respect to such transfer, consistent with the rules of Treas. Reg. § 1.367(a)-8. Where the U.S. transferor no longer holds and interest in the transferred corporation or the transferee, certain other U.S. transferors may now file a substitute GRA with respect to the transferred stock.
The IRS and Treasury do not expect that this notice will significantly alter the estimated total burdens associated with T.D. 9446. We expect that, at most, 50 more filers would be affected.
$0
No
No
No
No
No
Uncollected
Daniel McCall 202 622-3860
No
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
NOT-151367-11_Summary of Changes.pdf
REG-147144-06 Section 1.367(a)-8 Revisions; (T.D. 9446) Gain Recognition Agreements with Respect to Certain Transfers of Stock or Securities by United States Persons to Foreign Corporations.