Par. 2. Section 1.355-0 is amended by: 1. Removing from the introductory text “1.355-7” and adding “1.355-9” in its place. 2. Revising the entry for § 1.355-2(d)(2)(iv)(B). 3. Adding entries for § 1.355-2(d)(2)(iv)(B)( 1 ), ( 2 ), ( 3 ), ( 4 ), ( 5 ), ( 6 ), and ( 7 ). 4. Redesignating the entry for § 1.355-2(d)(2)(iv)(C) as the entry for § 1.355-2(d)(2)(iv)(F). 5. Adding a new entry for § 1.355-2(d)(2)(iv)(C). 6. Adding entries for § 1.355-2(d)(2)(iv)(C)( 1 ), ( 2 ), and ( 3 ). 7. Adding an entry for § 1.355-2(d)(2)(iv)(D). 8. Adding entries for § 1.355-2(d)(2)(iv)(D)( 1 ), ( 2 ), ( 3 ), and ( 4 ). 9. Adding entries for § 1.355-2(d)(2)(iv)(D)( 4 )( i ) and ( ii ). 10. Adding entries for § 1.355-2(d)(2)(iv)(D)( 5 ) and ( 6 ). 11. Adding entries for § 1.355-2(d)(2)(iv)(D)( 6 )( i ) and ( ii ). 12. Adding an entry for § 1.355-2(d)(2)(iv)(D)( 7 ). 13. Adding entries for § 1.355-2(d)(2)(iv)(D)( 7 )( i ) and ( ii ). 14. Adding an entry for § 1.355-2(d)(2)(iv)(D)( 8 ). 15. Adding an entry for § 1.355-2(d)(2)(iv)(E). 16. Redesignating the entry for § 1.355-2(d)(5) as the entry for § 1.355-2(d)(6). 17. Adding a new entry for § 1.355-2(d)(5). 18. Adding entries for § 1.355-2(d)(5)(i), (ii), (iii), and (iv). 19. Adding entries for § 1.355-2(i)(1), (i)(1)(i) and (ii), and (i)(2). 20. Adding an entry for § 1.355-8. 21. Adding entries for § 1.355-9. The revisions and additions read as follows:
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§ 1.355-2 Limitations.
* * * * *
(d) * * *
(2) * * *
(iv) * * *
(B) Definitions.
( 1 ) Business.
( 2 ) Business Assets.
( 3 ) Nonbusiness Assets.
( 4 ) Total Assets.
( 5 ) Nonbusiness Asset Percentage.
( 6 ) Separate Affiliated Group, SAG, CSAG, and DSAG.
( 7 ) 50-Percent-Owned Group, Member of a 50-Percent-Owned Group.
(C) Presence of Nonbusiness Assets as evidence of device.
( 1 ) Ownership of Nonbusiness Assets.
( 2 ) Difference between Nonbusiness Asset Percentages.
( 3 ) Cross-reference.
(D) Operating rules.
( 1 ) Multiple controlled corporations.
( 2 ) Treatment of SAG as a single corporation.
( 3 ) Time to identify assets and determine character of assets.
( 4 ) Time to determine fair market value of assets.
( i ) In general.
( ii ) Consistency.
( 5 ) Fair market value.
( 6 ) Interest in partnership.
( i ) In general.
( ii ) Exception for certain interests in partnerships.
( 7 ) Stock in corporation.
( i ) In general.
( ii ) Exception for stock in Member of a 50-Percent-Owned Group.
( 8 ) Obligation between distributing corporation or controlled corporation and certain partnerships or Members of 50-Percent-Owned Groups.
(E) Anti-abuse rule.
* * * * *
(5) Distributions involving separation of Business Assets from Nonbusiness Assets.
(i) In general.
(ii) Definitions and operating rules.
(iii) Certain distributions involving separation of Nonbusiness Assets from Business Assets.
(iv) Anti-abuse rule.
* * * * *
(i) * * *
(1) Paragraph (d) of this section.
(i) In general.
(ii) Transition rule.
(2) Paragraph (g) of this section.
* * * * *
§ 1.355-8 Reserved.
§ 1.355-9 Minimum percentage of Five-Year-Active-Business Assets.
(a) Definitions.
(1) Distributing, Controlled.
(2) Five-Year-Active Business.
(3) Five-Year-Active-Business Assets.
(4) Non-Five-Year-Active-Business Assets.
(5) Total Assets.
(6) Five-Year-Active-Business Asset Percentage.
(7) Separate Affiliated Group, CSAG, and DSAG.
(b) Five percent minimum Five-Year-Active-Business Asset Percentage.
(c) Operating rules.
(1) Treatment of SAG and fair market value.
(2) Time to identify assets, determine character of assets, and determine fair market value of assets.
(3) Interest in partnership.
(i) In general.
(ii) Exception for certain interests in partnerships.
(d) Anti-abuse rule.
(e) Effective/applicability date.
(1) In general.
(2) Transition rule.