Par. 3. Section 1.367(a)-1T is amended by: 1. Revising the second sentence of paragraph (b)(4)(i)(B). 2. Adding new paragraphs (b)(4)(i)(C) and (g)(4). The revision and additions to read as follows:
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(b) * * *
(4) * * *
(i) * * *
(B) * * * Any increase in the basis of the property received by the foreign corporation under section 362(a) or (b) for gain recognized by a U.S. person due to the application of section 367(a) shall be allocated to the transferred property with respect to which gain is recognized in proportion to the gain realized by the U.S. person on the transfer of such property. * * *
(C) A transfer of property by a U.S. person to a foreign corporation shall not be recharacterized for U.S. Federal tax purposes solely because the U.S. person recognizes gain in connection with the transfer under section 367(a)(1). For example, if a U.S. person transfers appreciated stock or securities to a foreign corporation in an exchange described in section 351, the transfer is not recharacterized as other than an exchange described in section 351 solely because the U.S. person recognizes gain in connection with the transfer under section 367(a)(1).
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(g) * * *
(4) The rules in paragraphs (b)(4)(i)(B) and (C) of this section apply to transfers occurring on or after the date 30 days after the date these regulations are published as final regulations in the Federal Register . For guidance with respect to paragraph (b)(4)(i)(B) of this section before the date 30 days after the date these regulations are published as final regulations in the Federal Register , see 26 CFR part 1 revised as of April 1 for the year before the date these regulations are published as final regulations in the Federal Register .