The IRS on Tuesday, July 1, withdrew proposed regulations on the treatment of built-in items of income, gain, deduction and loss that a loss corporation considers following an ownership change under Sec. 382(h).
The action, effective Wednesday when it’s published in the Federal Register, withdraws the notice of proposed rulemaking issued in 2019 and a notice issued in 2020 that modified certain provisions of the 2019 proposed regulations.
The IRS said that it received several comments in response to the 2019 proposed regulations, many of which were critical of its view that the proposed regulations would streamline the calculation of built-in gains and built-in losses for taxpayers. The IRS withdrew the regulations in response to those comments, it said.
The IRS expects to issue a revised notice of proposed rulemaking after it studies the issues addressed in the 2019 proposed regulations. Read more.