# Effect of section 338 election on insurance company targets (temporary).
**AGENCY:**
Internal Revenue Service (IRS), Treasury.
**ACTION:**
Correcting amendment.
**SUMMARY:**
This document corrects final and temporary regulations (TD 9257) that were published in the *Federal Register* on Monday, April 10, 2006 (71 FR 17990) applying to a deemed sale or acquisition of an insurance company's assets pursuant to an election under section 338 of the Internal Revenue Code, to a sale or acquisition of an insurance trade or business subject to section 1060, and to the acquisition of insurance contracts through assumption reinsurance.
**DATES:**
This correction is effective April 10, 2006.
**FOR FURTHER INFORMATION CONTACT:**
Mark Weiss, (202) 622-7790 (not a toll-free number).
**SUPPLEMENTARY INFORMATION:**
**Background**
The final and temporary regulations (TD 9257) that are the subjects of this correction are under sections 197, 338, 381, and 1060 of the Internal Revenue Code.
**Need for Correction**
As published, TD 9257 contains an error that may prove to be misleading and is in need of clarification.
**List of Subjects in 26 CFR Part 1**
Income taxes, Reporting and recordkeeping requirements.
**26 CFR Part 1**
**Correction of Publication**
Accordingly, 26 CFR part 1 is corrected by making the following correcting amendment:
**PART 1—INCOME TAXES**
*Paragraph 1.* The authority citation for part 1 continues to read, in part, as follows:
**Authority:**
26 U.S.C. 7805 * * *
**26 CFR Part 1**
*Par. 2.* Section 1.338.11T is corrected by revising paragraph (d)(3)(ii)( *2* ) to read as follows:
§ 1.338-11T
(d) * * *
(3) * * *
(ii) * * *
( *2* ) B equals old target's undiscounted unpaid losses (determined under section 846(b)(1) as of the close of the acquisition date;
Guy R. Traynor,
Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel, (Procedure and Administration).