[Code of Federal Regulations] [Title 26, Volume 11] [Revised as of April 1, 2004] From the U.S. Government Printing Office via GPO Access [CITE: 26CFR1.1017-1T] [Page 77] TITLE 26--INTERNAL REVENUE CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY (CONTINUED) PART 1_INCOME TAXES--Table of Contents Sec. 1.1017-1T Basis reductions following a discharge of indebtedness (temporary). (a) Through (b)(3) [Reserved]. For further guidance, see Sec. 1.1017-1(a) through (b)(3). (4) Transactions to which section 381 applies. In the case of a transaction described in section 381(a) that ends a taxable year in which the distributor or transferor corporation excludes COD income from gross income under section 108(a), the basis of property acquired by the acquiring corporation in the transaction shall reflect the reductions required by section 1017 and this section. For this purpose, the basis of property of the distributor or transferor corporation immediately prior to the transaction described in section 381(a), but after the determination of tax for the year of the discharge, shall be available for reduction under section 108(b)(2). See Sec. 1.108-7T. This paragraph (b)(4) applies to discharges of indebtedness occurring after July 17, 2003. (c) through (g)(2)(iii)(A) [Reserved]. For further guidance, see Sec. 1.1017-1(c) through (g)(2)(iii)(A). (g)(2)(iii)(B) Taxpayer's requirement. For taxable years beginning before January 1, 2003, statements described in Sec. 1.1017- 1(g)(2)(iii)(A) must be attached to a taxpayer's timely filed (including extensions) Federal income tax return for the taxable year in which the taxpayer has COD income that is excluded from gross income under section 108(a). For taxable years beginning after December 31, 2002, taxpayers must retain the statements and keep them available for inspection in the manner required by Sec. 1.6001-1(e), but are not required to attach the statements to their returns. (g)(2)(iv) through (i) [Reserved]. For further guidance, see Sec. 1.1017-1(g)(2)(iv) through (i). [T.D. 9080, 68 FR 42593, July 18, 2003, as amended by T.D. 9100, 68 FR 70706, Dec. 19, 2003]