Today’s Federal Register is here.
The Federal Register contains temporary regulations which provide rules to prevent the duplication and acceleration of loss through the assumption by a partnership of a liability of a partner in a nonrecognition transaction. The temporary reg.’s also prohibit partners and partnerships engaging in transactions described in IRS Notice 2000-44 from relying on the exception in Internal Revenue Code (“Code”) section 358(h)(2)(B).
The Federal Register contains proposed regulations relating to the definition of liabilities under section 752 of the Code. The proposed reg.’s provide rules regarding a partnership’s assumption of certain fixed and contingent obligations in exchange for a partnership interest and provide conforming changes to certain regulations. They also provide rules under Code section 358(h) for assumptions of liabilities by corporations from partners and partnerships.
The Federal Register also contains a lengthy DOL Prohibited Transaction Exemption 2003-19, to replace Prohibited Transaction Exemption 97-63, involving State Street Bank and Trust Company (State Street). The Exemption permits securities lending transactions between State Street, its United States (U.S.) domiciled affiliates, and certain employee benefit plans and/or commingled investment funds holding plan assets, provided that State Street (through any division or U.S. affiliate of State Street or of its parent) acts as securities lending agent (or sub-agent). The exemption also permits receipt of compensation by a U.S. registered introducing broker affiliated with State Street in connection with an arrangement whereby securities are lent to an unrelated U.S. registered broker-dealer who in turn lends such securities to clients of the introducing Broker, provided that certain conditions are satisfied.