Par. 4. Section 1.952-1 is amended by: 1. Revising paragraph (e)(4); 2. Redesignating paragraphs (f)(4) and (5) as paragraphs (f)(5) and (6), respectively; 3. Adding a new paragraph (f)(4); 4. In newly redesignated paragraph (f)(5), designating Examples (1) through (4) as paragraphs (f)(5)(i) through (iv), respectively; 5. In newly designated paragraphs (f)(5)(i) through (iv), redesignating the paragraphs in the first column as the paragraphs in the second column in the following table: 6. Revising newly designated paragraph (f)(6). The revisions and addition read as follows:
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(e) * * *
(4) Coordination with sections 953 and 954. The rules of this paragraph (e) apply after the determination of net foreign base company income, as provided in § 1.954-1(a)(5). This paragraph (e)(4) applies to taxable years of controlled foreign corporations beginning after [the date that final regulations are filed for public inspection], and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. For taxable years before those described in the preceding sentence, see § 1.952-1(e)(4), as contained in 26 CFR part 1 revised as of April 1, 2020.
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(f) * * *
(4) Carryover of recapture accounts in transactions to which section 381(a) applies. In the case of a distribution or transfer described in section 381(a), any recapture accounts (as described in paragraph (f)(2)(i) of this section) of the distributor or transferor corporation are treated as recapture accounts of the acquiring corporation as of the close of the date of the distribution or transfer. If the acquiring corporation has recapture accounts in the same separate category (as defined in § 1.904-5(a)(4)(v) and § 1.954-1(c)(1)(iii)(1) or (2)), the recapture accounts of the distributor or transferor corporation are added to the recapture accounts of the acquiring corporation in such category; if not, the acquiring corporation adopts the recapture accounts of the distributor or transferor corporation in such category.
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(6) Effective date —(i) Paragraphs (e) and (f). Except as provided in paragraphs (e)(4) and (f)(6)(ii) of this section, paragraph (e) of this section and this paragraph (f) apply to taxable years of a controlled foreign corporation beginning after March 3, 1997.
(ii) Paragraph (f)(4). Paragraph (f)(4) of this section applies to taxable years of a corporation ending on or after July 20, 2020 (even if the distribution or transfer described in section 381(a) occurred in a taxable year ending before July 20, 2020).
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