(A) Facts. The UST owns f1 and TFD. The F1 stock has an underlying 100x and a fair value of 90x, and the TFD share has a 0x base and a fair value of 100x. UST also owns properties with a 10x base and a fair value of 10x. In Year 1, according to a Section 351 exchange, UST transfers the real estate, TFD and F1 shares to TFC in exchange for 20 TFC shares. UST enters into a recognition agreement for the transfer of the TFD share. The amount of the profit recognition agreement is 100x. UST takes the position that the basis of each TFC share received on the stock exchange is US$5.5x (an amount proportional to 110 times the aggregate base of the transferred property). In year 3, UST sells all TFC shares in a transaction that will account for total realized earnings and be included in taxable income. B) a calculation of the amount of profit incorporated on the transferred shares or securities subject to the benefit recognition agreement, taking into account the basis and fair value on the date of the first transfer; The IRS and the Department of Finance have decided that the discharge should be extended for non-intentional breaches of certain other reporting obligations under Section 367 bis, which are not covered by the proposed regulations.

By this Treasury decision, Provisions 1.367 (a) 2 (excluding Section 367 (a) (a) (1) for assets transferred for trading or activity outside the United States) and . 1.367 (a)-7 (with respect to the application of Section 367 (a) to an asset transfer by a national destination company in an exchange described in Section 361), so that a subject transferred a subject to an asset transfer by a national destination company in an exchange described in Section 361, to have a subject transferred a subject to section 361. , for the sole purpose of Section 367, point (a), which did not violate the reporting obligations under paragraphs 1.367 (a) -2 and 1,367 (a) -7, by demonstrating that the error was not intentionally committed. As a result, temporary discharge provisions on causes are repealed. Since cases in which a discharge is sought under Section 1.367 A) -2 and many discharge applications are also subject to section 6038B reports and the provisions of this Regulation, the penalty for non-compliance with a reporting obligation should generally be sufficient to promote appropriate reporting and compliance. (i) foreign agency transferred. Where, for the most part, all the assets of the foreign company transferred are transferred to a foreign acquisition company in a Section 361 trading company, which is part of a triangular asset reorganization, the restructuring exchanges are not triggering events when a new profit recognition agreement is entered into in accordance with paragraphs (k) (7) (i) i) to (C) of this section.