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Federal Register / Vol. 71, No.

235 / Thursday, December 7, 2006 / Rules and Regulations 70877

§ 1.199–5T Application of section 199 to from this latter disposition are treated as ■ Par. 2. Section 1.704–1 is amended by
pass-thru entities for taxable years non-DPGR. revising instructional Par. 2, number 2
beginning after May 17, 2006, the enactment to read as follows:
date of the Tax Increase Prevention and
* * * * *
1. * * *
Reconciliation Act of 2005 (temporary). LaNita Van Dyke, 2. The heading and text of paragraphs
(e) * * * Chief, Publications and Regulations Branch, (b)(1)(ii)(b), and (b)(5) Examples 25
Legal Processing Division, Associate Chief through 27 are revised.
(4) * * * Counsel (Procedure and Administration).
(ii) * * * * * * * *
[FR Doc. E6–20724 Filed 12–6–06; 8:45 am]
(A) * * * In this step, in this ■ Par. 3. Section 1.704–1(d)(5) is
example, the portion of the trustee amended by revising Example 25
commissions not directly attributable to paragraph (ii), the ninth sentence and
the rental operation ($2,000) is directly DEPARTMENT OF THE TREASURY Example 26 paragraph (ii), the eighth
attributable to non-trade or business sentence to read as follows:
activities. In addition, the state income Internal Revenue Service
§ 1.704–1 Partner’s distributive share.
and personal property taxes are not
26 CFR Part 1 * * * * *
directly attributable under § 1.652(b)–
3(a) to either trade or business or non- [TD 9292] Example 25. * * *
trade or business activities, so the (ii) * * * Accordingly, the country X taxes
RIN 1545–BB11 will be reallocated according to the partners’
portion of those taxes not attributable to
interests in the partnership.
either the PRS interests or the rental Partner’s Distributive Share: Foreign Example 26. * * *
operation is not a trade or business Tax Expenditures; Correction (ii) * * * Because AB’s partnership
expense and, thus, is not taken into agreement allocates the $80,000 of country X
account in computing QPAI. The AGENCY: Internal Revenue Service (IRS), taxes and $40,000 of country Y taxes in
portion of the state income and personal Treasury. proportion to the distributive shares of
property taxes that is treated as an other ACTION: Correcting amendments. income to which such taxes relate, the
trade or business expense is $3,000 allocations are deemed to be in accordance
($5,000 × $30,000 total trade or business SUMMARY: This document contains with the partners’ interests in the partnership
correction to final regulations (TD 9292) under paragraph (b)(4)(viii) of this section.
gross receipts/$50,000 total gross
receipts). * * * that were published in the Federal * * * * *
* * * * * Register on Thursday, October 19, 2006
LaNita Van Dyke,
(71 FR 61648) regarding the allocation
(g) No attribution of qualified of creditable foreign tax expenditures by Chief, Publications and Regulations Branch,
activities. Except as provided in Legal Processing Division, Associate Chief
partnerships. Counsel (Procedure and Administration).
§ 1.199–3T(i)(7) regarding qualifying in- DATES: The correction is effective
kind partnerships and § 1.199–3T(i)(8) [FR Doc. E6–20722 Filed 12–6–06; 8:45 am]
October 19, 2006.
regarding EAG partnerships, an owner BILLING CODE 4830–01–P
of a pass-thru entity is not treated as
conducting the qualified production Timothy J. Leska, (202) 622–3050 or
activities of the pass-thru entity, and Michael I. Gilman (202) 622–3850 (not DEPARTMENT OF HOMELAND
vice versa. This rule applies to all toll-free numbers). SECURITY
partnerships, including partnerships SUPPLEMENTARY INFORMATION:
that have elected out of subchapter K Coast Guard
under section 761(a). Accordingly, if a
partnership manufactures QPP within The correction notice that is the 33 CFR Part 117
the United States, or produces a subject of this document is under
section 704 of the Internal Revenue [CGD08–06–005]
qualified film or produces utilities in
the United States, and distributes or Code. RIN 1625–AA09
leases, rents, licenses, sells, exchanges, Need for Correction Drawbridge Operation Regulations;
or otherwise disposes of such property As published, final regulations (TD Arkansas Waterway, Arkansas
to a partner who then, without 9292) contain errors that may prove to
performing its own qualifying activity, be misleading and are in need of AGENCY: Coast Guard, DHS.
leases, rents, licenses, sells, exchanges, clarification. ACTION: Final rule.
or otherwise disposes of such property,
then the partner’s gross receipts from List of Subjects in 26 CFR Part 1 SUMMARY: The Coast Guard is revising
this latter lease, rental, license, sale, Income taxes, Reporting and the drawbridge operations for the Rob
exchange, or other disposition are recordkeeping requirements. Roy Drawbridge across the Arkansas
treated as non-DPGR. In addition, if a Waterway at Mile 67.4 at Pine Bluff,
partner manufactures QPP within the Correction of Publication Arkansas, the Baring Cross Railroad
United States, or produces a qualified ■ Accordingly, 26 CFR part 1 is Drawbridge across the Arkansas
film or produces utilities in the United corrected by making the following Waterway at Mile 119.6 at Little Rock,
States, and contributes or leases, rents, correcting amendments: Arkansas, and the Van Buren Railroad
licenses, sells, exchanges, or otherwise Drawbridge across the Arkansas
disposes of such property to a PART 1—INCOME TAXES Waterway at Mile 300.8 at Van Buren,
partnership which then, without Arkansas, to reflect the actual
performing its own qualifying activity, ■ Paragraph 1. The authority citation procedures currently being followed. In
leases, rents, licenses, sells, exchanges, for part 1 continues to read, in part, as addition, the following three bridges
or otherwise disposes of such property, follows: will be removed from 33 CFR 117.123
then the partnership’s gross receipts Authority: 26 U.S.C. 7805 * * * as they are locked in the open-to-

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