# Disregard of certain stock attributable to multiple domestic entity acquisitions (temporary).
**AGENCY:**
Internal Revenue Service (IRS), Treasury.
**ACTION:**
Final and temporary regulations; correcting amendment.
**SUMMARY:**
This document contains corrections to a correction document for final and temporary regulations (TD 9761) that was published in the *Federal Register* on June 23, 2016 (81 FR 40810).
**DATES:**
This correction is effective on July 19, 2016 and applicable on June 23, 2016.
**FOR FURTHER INFORMATION CONTACT:**
Rose E. Jenkins at (202) 317-6934 (not a toll free number).
**SUPPLEMENTARY INFORMATION:**
**Background**
The final and temporary regulations (TD 9761) that are the subject of this correction are under sections 304, 367, 956, 7701(l), and 7874 of the Internal Revenue Code.
**Correction of Publication**
In correcting amendment FR Doc. 2016-14649, published in the issue of Thursday, June 23, 2016 (81 FR 40810), make the following correction:
On page 40811, in the first column, remove amendatory instruction 6.
**List of Subjects in 26 CFR Part 1**
Income taxes, Reporting and recordkeeping requirements.
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 1.956-2T is amended by revising the first sentence of paragraph (a)(4)(iv) *Example 3.* (A), the second sentence of paragraph (a)(4)(iv) *Example 3.* (B), and the third sentence of paragraph (a)(4)(iv) *Example 4.* (B) to read as follows:
§ 1.956-2T
(a) * * *
(4) * * *
(iv) * * *
*Example 3.* (A) *Facts.* Before the inversion transaction, FA also wholly owns USP, a domestic corporation, which, in turn, wholly owns, LFS, a foreign corporation that is a controlled foreign corporation. * * *
(B) * * * Because LFS was a controlled foreign corporation and a member of the EAG with respect to the inversion transaction on the completion date, and DT was not a United States shareholder with respect to LFS on or before the completion date, LFS is excluded from the definition of expatriated foreign subsidiary pursuant to § 1.7874-12T(a)(9)(ii). * * *
*Example 4.* * * *
(B) * * * Because LFSS was not a member of the EAG with respect to the inversion transaction on the completion date, LFSS is not excluded from the definition of expatriated foreign subsidiary pursuant to § 1.7874-12T(a)(9)(ii). * * *
**26 CFR Part 1**
*Par. 3.* Section 1.7874-8T is amended by revising the ninth sentence of paragraph (h) *Example 3.* (ii) to read as follows:
§ 1.7874-8T
(h) * * *
*Example 3.* * * *
(ii) * * * Accordingly, the excluded amount is $112.50x calculated as 150 (200, the total number of prior acquisition shares, less 50, the allocable redeemed shares) multiplied by $0.75x (the fair market value of a single share of FA stock on the completion date with respect to the DT2 acquisition). * * *
Martin V. Franks,
Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration).