# Modifications of certain derivative contracts (temporary).
**AGENCY:**
Internal Revenue Service (IRS), Treasury.
**ACTION:**
Correcting amendment.
**SUMMARY:**
This document describes correcting amendments to final and temporary regulations (TD 9538) that address when a transfer or assignment of certain derivative contracts does not result in an exchange to the nonassigning counterparty for purposes.
These regulations were published in the *Federal Register* on Friday, July 22, 2011.
**DATES:**
This correction is effective on August 19, 2011, and is applicable beginning July 22, 2011.
**FOR FURTHER INFORMATION CONTACT:**
Andrea M. Hoffenson, (202) 622-3920 (not a toll-free number).
**SUPPLEMENTARY INFORMATION:**
**Background**
The final and temporary regulations that are the subject of this correction are under section 1001 of the Internal Revenue Code.
**Need for Correction**
As published July 22, 2011 (76 FR 43892), the final and temporary regulations (TD 9538) contain errors that may prove to be misleading and are in need of clarification.
**List of Subjects in 26 CFR Part 1**
Income taxes, Reporting and recordkeeping requirements.
**Correction of Publication**
Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:
**26 CFR Part 1**
**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 1.1001-4T is amended by revising paragraphs (a)(1), (b)(1) and (b)(3) to read as follows:
§ 1.1001-4T
(a) * * *
(1) Both the party transferring or assigning its rights and obligations under the derivative contract and the party to which the rights and obligations are transferred or assigned are either a dealer or a clearinghouse;
(b) * * *
(1) *Dealer.* For purposes of this section, a *dealer* is a taxpayer who meets the definition of a dealer in securities in section 475(c)(1) or is a dealer in commodities derivative contracts.
(3) *Derivative contract.* For purposes of this section, a *derivative contract* is a contract described in—
(i) Section 475(c)(2)(D), 475(c)(2)(E), or 475(c)(2)(F) without regard to the last sentence of section 475(c)(2) referencing section 1256;
(ii) Section 475(e)(2)(B), 475(e)(2)(C), or 475(e)(2)(D); or
(iii) Section 1.446-3(c)(1).
LaNita Van Dyke,
Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration).