This document contains correction to final regulations (T.D. 9292, 2006-47 I.R.B. 914) that were published in the Federal Register on Thursday, October 19, 2006 (71 FR 61648) regarding the allocation of creditable foreign tax expenditures by partnerships.
Timothy J. Leska, (202) 622-3050 or Michael I. Gilman (202) 622-3850 (not toll-free numbers).
The correction notice that is the subject of this document is under section 704 of the Internal Revenue Code.
As published, final regulations (T.D. 9292) contain errors that may prove to be misleading and are in need of clarification.
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Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:
Paragraph 1. The authority citation for part 1 continues to read, in part, as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.704-1 is amended by revising instructional Par. 2, number 2 to read as follows:
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2. The heading and text of paragraphs (b)(1)(ii)(b), and (b)(5) Examples 25 through 27 are revised.
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Par. 3. Section 1.704-1(d)(5) is amended by revising Example 25 paragraph (ii), the ninth sentence and Example 26 paragraph (ii), the eighth sentence to read as follows:
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Example 25. * * *
(ii) * * * Accordingly, the country X taxes will be reallocated according to the partners’ interests in the partnership.
Example 26. * * *
(ii) * * * Because AB’s partnership agreement allocates the $80,000 of country X taxes and $40,000 of country Y taxes in proportion to the distributive shares of income to which such taxes relate, the allocations are deemed to be in accordance with the partners’ interests in the partnership under paragraph (b)(4)(viii) of this section.
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