[Federal Register Volume 59, Number 170 (Friday, September 2, 1994)]
[Rules and Regulations]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-21765]
[[Page Unknown]]
[Federal Register: September 2, 1994]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 8417]
RIN 1545-AQ53
Limitation on Passive Activity Losses and Credits; Correction
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Correcting Amendments.
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SUMMARY: This document contains corrections to the final regulations
(TD 8417) which were published in the Federal Register for Friday, May
15, 1992 (57 FR 20747). The final regulations relate to the limitation
on passive activity losses and credits.
EFFECTIVE DATE: May 15, 1992.
FOR FURTHER INFORMATION CONTACT: Donna J. Welch, (202) 622-3080 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Background
The final regulations that are the subject of these correcting
amendments are under section 469 of the Internal Revenue Code.
Need for Correction
As published, TD 8417 contains errors that may prove to be
misleading and is in need of clarification.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Accordingly, 26 CFR part 1 is corrected by making the following
correcting amendments:
PART 1--INCOME TAX; TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 1953
Paragraph 1. The authority citation for part 1 continues to read in
part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.469-1 is amended as follows:
a. In paragraph (f)(4)(iii), paragraph (iii) of Example 3., the
word ``rstaurant'' is removed from the third sentence and the word
``restaurant'' is added in its place.
b. In paragraph (f)(4)(iii), paragraph (iii) of Example 3., the
last sentence is revised to read as set forth below.
c. In paragraph (f)(4)(iii), paragraph (iv) of Example 3., the word
``or'' is removed from the last sentence and the word ``of'' is added
in its place.
Sec. 1.469-1 General Rules.
* * * * *
(f) * * *
(4) * * *
(iii) * * *
Example 3. * * *
(iii) * * * Thus, the taxpayer can ordinarily treat $3,000 of the
disallowed deductions as deductions from the restaurant activity for
1995, and $7,000 of the disallowed deductions as deductions from the
catering activity for 1995.
* * * * *
Par. 3. Section 1.469-2 is amended as follows:
a. In paragraph (c)(2)(iii)(E), the reference to ``paragraph
(6)(2)(iii)'' is removed from the first sentence and the reference
``paragraph (c)(2)(iii)'' is added in its place.
b. In paragraph (c)(2)(iii)(G), Example 1., the date ``Decemner 31,
2005.'' is removed from the third sentence and the date ``December 31,
2005.'' is added in its place.
c. In paragraph (c)(2)(v)(C), in paragraph (ii) of Example 1., the
reference to ``Sec. 1.469-2t(c)(2)'' is removed from the first sentence
and the reference ``Sec. 1.469-2T(c)(2)'' is added in its place.
d. In paragraph (c)(2)(v)(C), in paragraph (ii) of Example 3., the
year ``1977'' is removed from the last sentence and the year ``1997''
is added in its place.
e. In paragraph (c)(6)(i)(A), the year ``1996'' is removed and the
year ``1986'' is added in its place.
f. In paragraph (d)(5)(iii)(A), the reference to ``Sec. 1.469-
2T(2)(i)(C)'' is removed from the first sentence and the reference
``Sec. 1.469-2T(c)(2)(i)(C)'' is added in its place.
g. Paragraph (e)(3)(iii)(B) is revised as follows:
Sec. 1.469-2 Passive activity loss.
* * * * *
(e) * * *
(3) * * *
(iii) * * *
(B) An amount of gain that would have been treated as gain that is
not from a passive activity under paragraph (c)(2)(iii) of this section
(relating to substantially appreciated property formerly used in a
nonpassive activity), paragraph (c)(6) of this section (relating to
certain oil or gas properties), Sec. 1.469-2T(f)(5) (relating to
certain property rented incidental to development), paragraph (f)(6) of
this section (relating to property rented to a nonpassive activity), or
Sec. 1.469-2T(f)(7) (relating to certain interests in a passthrough
entity engaged in the trade or business of licensing intangible
property) would have been allocated to the holder (or such other
person) with respect to the interest if all of the property used in the
passive activity had been sold immediately prior to the disposition for
its fair market value on the applicable valuation date (within the
meaning of Sec. 1.469-2T(e)(3)(ii)(D)(1)); and
* * * * *
Par. 4. In section 1.469-11 paragraph (c)(1)(ii) is revised as
follows:
Sec. 1.469-11 Effective date and transition rules.
* * * * *
(c) * * *
(1) * * *
(ii) Property rented to a nonpassive activity. In applying
Sec. 1.469-2(f)(6) or Sec. 1.469-2T(f)(6) to a taxpayer's rental of an
item of property, the taxpayer's net rental activity income (within the
meaning of Sec. 1.469-2(f)(9)(iv) or Sec. 1.469-2T(f)(9)(iv)) from the
property for any taxable year beginning after December 31, 1987, does
not include the portion of the income (if any) that is attributable to
the rental of that item of property pursuant to a written binding
contract entered into before February 19, 1988.
* * * * *
Cynthia E. Grigsby,
Chief, Regulations Unit, Assistant Chief Counsel (Corporate).
[FR Doc. 94-21765 Filed 9-1-94; 8:45 am]
BILLING CODE 4830-01-P
