# Definition of predecessor and successor and limitations on gain recognition under section 355(e) and section 355(f).
**AGENCY:**
Internal Revenue Service (IRS), Treasury.
**ACTION:**
Correcting amendment.
**SUMMARY:**
This document contains a correction to Treasury Decision 9888, which was published in the *Federal Register* on Wednesday, December 18, 2019. Treasury Decision 9888 contained final regulations providing guidance regarding the distribution by a distributing corporation of stock or securities of a controlled corporation without the recognition of income, gain, or loss.
**DATES:**
This correction is effective on March 17, 2020. For dates of applicability, see § 1.355-8(i).
**FOR FURTHER INFORMATION CONTACT:**
W. Reid Thompson, (202) 317-5024, or Richard K. Passales, (202) 317-5024 (not toll-free numbers).
**SUPPLEMENTARY INFORMATION:**
**Background**
The final regulations (TD 9888) that are the subject of this correction are issued under section 355 of the Internal Revenue Code.
**Need for Correction**
As published December 18, 2019 (84 FR 69308), the final regulations (TD 9888; FR Doc. 2019-27110) contained an error that needs to be corrected.
**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 amendment:
**PART 1—INCOME TAXES**
**26 CFR Part 1**
*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 1.355-8 is amended by revising the seventh sentence of paragraph (h)(8)(ii)(A) to read as follows:
§ 1.355-8
(h) * * *
(8) * * *
(ii) * * *
(A) * * * The Reflection of Basis Requirement is satisfied because that C stock had a basis prior to the Distribution that was determined in whole or in part by reference to the basis of Separated Property (Asset 1 and Asset 2, respectively), and was neither distributed in a distribution to which section 355(e) applied nor transferred in a transaction in which the gain on that C stock was recognized in full during the Plan Period prior to the Distribution. * * *
Martin V. Franks,
Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel, (Procedure and Administration).