Par. 6. Section 1.861-3 is amended by: 1. In paragraph (a)(6), removing “A substitute dividend payment is a payment” in the first sentence and adding “A substitute dividend payment is a payment or a deemed payment” in its place, and adding a new second sentence. 2. In paragraph (d), replacing the third sentence with a new sentence. The additions read as follows:
(a) * * * * *
(6) Substitute dividend payments. * * * A deemed payment is a payment deemed to have been made in the amount (as determined under § 1.305-7(c)(4)) of a deemed distribution (as defined in § 1.305-1(d)(7)) that the owner of the transferred security is entitled to during the term of the transaction. * * *
* * * * *
(d) Effective/applicability date. * * * Paragraph (a)(6) of this section applies to payments made on or after the date of publication of the Treasury decision adopting these rules as final regulations in the Federal Register ; however, a taxpayer may rely on the rule in the second sentence of paragraph (a)(6) of this section for all deemed distributions (as defined in § 1.305-1(d)(7)) occurring on or after January 1, 2016, until the date of publication of a Treasury decision adopting these rules as final regulations in the Federal Register . * * *