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TREAS/IRS RIN: 1545-BI31 Publication ID: Fall 2010 
Title: Modification to Consolidated Return Regulation Permitting an Election To Treat a Liquidation of a Target, Followed by a Recontribution to a New Target, as a Cross-Chain Reorganization 
Abstract: This change to the regulations under Treasury Regulations section 1.1502-13(f)(5) is a modification that has been made necessary in light of the regulations under Treasury Regulations section 1.368-2(k) that were issued in October 2007. The existing section 1.1502-13(f)(5) election envisions that, when the election under that section is made, there is a cross-chain reorganization resulting in stock in a new corporation being a successor asset to the stock of a corporation that was previously liquidated. Under the section 1.368-2(k) regulations now in effect, the liquidation of a corporation followed by the transfer of the liquidated corporation’s assets to a new controlled corporation by the parent of the liquidated corporation would be an upstream reorganization followed by a drop of assets to a controlled corporation (the stock of the new corporation would not be a successor asset in this case). The modification will clarify that, when the election is made, the reorganization will be viewed as a cross-chain reorganization, rather than an upstream reorganization followed by a drop of assets, as it would be viewed under section 1.368-2(k). 
Agency: Department of the Treasury(TREAS)  Priority: Substantive, Nonsignificant 
RIN Status: Previously published in the Unified Agenda Agenda Stage of Rulemaking: Final Rule Stage 
Major: No  Unfunded Mandates: No 
CFR Citation: 26 CFR 1   
Legal Authority: 26 USC 7805    26 USC 1502   
Legal Deadline:  None
Timetable:
Action Date FR Cite
NPRM  09/04/2009  74 FR 45789   
NPRM Comment Period End  12/04/2009    
Final Action  12/00/2010    
Additional Information: REG-139068-08 Drafting attorney: Mary W. Lyons (202) 622-7056 Reviewing attorney: Kenneth E. Cohen (202) 622-3494 Treasury attorney: Donald Bakke (202) 622-0865 CC: CORP
Regulatory Flexibility Analysis Required: No  Government Levels Affected: None 
Federalism: No 
Included in the Regulatory Plan: No 
RIN Data Printed in the FR: No 
Agency Contact:
Mary W. Lyons
Attorney
Department of the Treasury
Internal Revenue Service
1111 Constitution Avenue NW.,
Washington, DC 20224
Phone:202 622-3860
Fax:202 622-6298
Email: mary.w.lyons@irscounsel.treas.gov