U.S. FEDRegulation
IRS final regulations: assumed section 357(c)(3)(A) liabilities do not reduce stock basis in consolidated group transfers
The Internal Revenue Service published final regulations, TD 10059, clarifying that in certain transfers between members of a consolidated group, a transferee member's assumption of liabilities described in section 357(c)(3)(A) does not reduce the transferor member's basis in the transferee's stock received in the transfer. The regulations amend 26 CFR 1.1502-80(d), take effect October 16, 2026, and apply to transactions in consolidated return years with return due dates after that date.
Key points
- TD 10059 revises 26 CFR 1.1502-80(d)(1) and adds paragraphs (d)(3) and (d)(4); RIN 1545-BJ87, 91 FR 65683.Federal Register
- Section 358(d)(2) excludes section 357(c)(3)(A) liabilities, other than those also described in section 357(c)(3)(B), from liabilities treated as money received.Federal Register
- Paragraph (d) does not apply if the transferor or transferee becomes a nonmember under the same plan or arrangement.Federal Register
- No comments were received on the December 30, 2024 reproposal; the regulations were adopted with non-substantive revisions.Federal Register
- The regulations are issued under Internal Revenue Code sections 1502 and 7805(a) and were approved September 16, 2026.Federal Register
Sources1 article across 1 outlet
Federal Register
Filed under
RegulationU.S.Section 357(c) Non-Applicability to Consolidated Groups (IRS)CorporateTaxFor practitionersFor governance