# Prop. Treas. Reg. § 1.704-3: Contributed property.

Proposed regulation, not in force. REG-151416-06, 79 FR 65151, published 2014-11-03 <https://www.federalregister.gov/documents/2014/11/03/2014-25487/certain-distributions-treated-as-sales-or-exchanges>. Interprets 26 U.S.C. § 704.

Par. 4. Section 1.704-3 is amended in paragraph (a)(9) by adding a sentence immediately following the first sentence to read as follows:

(a) * * *

(9) * * * If a partnership (the upper-tier partnership) owns an interest in another partnership (the lower-tier partnership), and both the upper-tier partnership and the lower-tier partnership simultaneously revalue partnership property pursuant to § 1.704-1(b)(2)(iv)( f ), the principles of this paragraph (a)(9) shall apply to any reverse section 704(c) allocations created upon the revaluation. * * *

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