Internal Revenue Bulletins  
Announcement 2006-104 December 26, 2006

Partnerís Distributive Share:
Foreign Tax Expenditures; Correction

AGENCY:

Internal Revenue Service (IRS), Treasury.

ACTION:

Correcting amendments.

SUMMARY:

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.

DATES:

The correction is effective October 19, 2006.

FOR FURTHER INFORMATION CONTACT:

Timothy J. Leska, (202) 622-3050 or Michael I. Gilman (202) 622-3850 (not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Background

The correction notice that is the subject of this document is under section 704 of the Internal Revenue Code.

Need for Correction

As published, final regulations (T.D. 9292) contain errors that may prove to be misleading and are in need of clarification.

* * * * *

Correction of Publication

Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:

PART 1—INCOME TAXES

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:

1. * * *

2. The heading and text of paragraphs (b)(1)(ii)(b), and (b)(5) Examples 25 through 27 are revised.

* * * * *

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:

§ 1.704-1 Partner’s distributive share.

* * * * *

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.

* * * * *

LaNita Van Dyke,
Chief, Publications and Regulations Branch,
Legal Processing Division,
Associate Chief Counsel
(Procedure and Administration).

Note

(Filed by the Office of the Federal Register on December 6, 2006, 8:45 a.m., and published in the issue of the Federal Register for December 7, 2006, 71 F.R. 70877)

Internal Revenue Bulletin 2006-52

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