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Federal Register / Vol. 86, No. 188 / Friday, October 1, 2021 / Rules and Regulations 90.101

Reserved
issued under sections 861, 881, 904, and 905 of the Internal Revenue Code.

Bryan Newland, Assistant SecretaryIndian Affairs.

Need for Correction
FR Doc. 202121385 Filed 93021; 8:45 am
As published on Thursday, November 12, 2020 85 FR 71998, the final regulations TD 9922 contain errors that need to be corrected.

BILLING CODE 433715P

DEPARTMENT OF THE TREASURY

List of Subjects in 26 CFR Part 1

Internal Revenue Service
Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 1
RIN 1545BP21; 1545BP22

Guidance Related to the Allocation and Apportionment of Deductions and Foreign Taxes, Foreign Tax Redeterminations, Foreign Tax Credit Disallowance Under Section 965g, Consolidated Groups, Hybrid Arrangements and Certain Payments Under Section 951A; Correction Internal Revenue Service IRS, Treasury.
ACTION: Correcting amendments.
AGENCY:

This document contains corrections to the final regulations Treasury Decision 9922 that were published in the Federal Register on Thursday, November 12, 2020. Treasury Decision 9922 provided guidance relating to the allocation and apportionment of deductions and creditable foreign taxes, the definition of financial services income, foreign tax redeterminations, availability of foreign tax credits under the transition tax, the application of the foreign tax credit limitation to consolidated groups, adjustments to hybrid deduction accounts to take into account certain inclusions in income by a United States shareholder, conduit financing arrangements involving hybrid instruments, and the treatment of certain payments under the global intangible low-taxed income provisions.
DATES: Effective on October 1, 2021, and applicable as of November 12, 2020.
FOR FURTHER INFORMATION CONTACT:
Concerning 1.8618 and 1.86117, Jeffrey P. Cowan, 202 3174924;
concerning 1.86120, 1.9044, and 1.9046, Suzanne M. Walsh, 202 317
4908; concerning 1.8813, Richard F.
Owens, 202 3176501; concerning 1.904g-3, Jeffrey L. Parry, 202 317
4916; concerning 1.9054T, Corina Braun, 202 3175004 not toll-free numbers.
SUMMARY:

Background The final regulations TD 9922 that are the subject of this correction are
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Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:
PART 1INCOME 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 1.8618 is amended by revising the last sentence of paragraph e5ii and the first and second sentences of paragraph e8ii to read as follows:

1.8618 Computation of taxable income from sources within the United States and from other sources and activities.

e
5
ii The deductions are apportioned among the statutory and residual groupings on the basis of the relative values as determined under the asset method in 1.8619 for purposes of allocating and apportioning the taxpayers interest expense of the assets that were involved in the event or if the taxpayer no longer owns the assets involved in the event the assets that are used to produce or sell products or services in the relevant class in each grouping; such values are determined in the year the deductions are allowed.

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ii A net operating loss taken as a deduction in computing taxable income for a particular taxable year as allowed under section 172 is allocated and apportioned to statutory and residual groupings by reference to the statutory and residual groupings of the components of the net operating loss as determined under paragraph e8i of this section that is deducted in the taxable year. Except as provided under the rules for an operative section, if the full net operating loss carryover is not taken as a deduction in a taxable year, the partial net operating loss deduction is treated as ratably comprising the
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components of a net operating loss.

Par. 3. Section 1.86117 is amended in paragraph d4iv, by revising the first sentence and adding a sentence at the end of the paragraph to read as follows:
1.86117 Allocation and apportionment of research and experimental expenditures.

Correction of Publication
TD 9922

54367

d
4
iv If the controlled party has entered into a cost sharing arrangement, in accordance with the provisions of 1.4827, with the taxpayer for the purpose of developing intangible property, then ordinarily the controlled party is not reasonably expected to acquire rights in intangible property that would arise from the taxpayers share of the R&E expenditures with respect to the cost shared intangibles as defined in 1.4827j1i; acquire products in which such intangible property is embedded or used in connection with the manufacture or sale of such products; or receive services that incorporate or directly or indirectly benefit from such intangible property.
However, the rule in this paragraph d4iv does not apply, and the controlled partys sales are taken into account, to the extent the taxpayer licenses, or has licensed, to the controlled party intangible property resulting from a cost sharing arrangement with the controlled party.

Par. 4. Section 1.86120 is amended by revising the first sentence of paragraph d3iB2 to read as follows:
1.86120 Allocation and apportionment of foreign income taxes.

d
3
i
B
2 The foreign dividend amount is, to the extent of the U.S.
dividend amount, assigned to the same statutory and residual grouping or ratably to the groupings to which a distribution of the U.S. dividend amount is assigned under Federal income tax law.

1.8813

Amended
Par. 5. For each entry in 1.8813 in the Paragraph Heading column, remove the language in Remove column and add in its place the
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