[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]