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Section 1288.-Treatment of Original Issue Discount on Tax-Exempt Obligations
The adjusted applicable federal short-term, mid-term, and long-term rates are set forth for the month of June 2005. See Rev. Rul. 2005-32, page 1156.
Section 1446.-Withholding Tax on Foreign Partners' Share of Effectively Connected Income
26 CFR 1.1446-1: Withholding tax on foreign partner's share of effectively connected taxable income.
DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Parts 1, 301, and 602
Section 1446 Regulations; Withholding on Effectively Connected Taxable Income Allocable to Foreign Partners
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final and temporary regulations.
SUMMARY: This document contains final regulations regarding a partnership's obligation to pay withholding tax under section 1446 on effectively connected taxable income allocable under section 704 to a foreign partner. The regulations interpret the rules added to the Internal Revenue Code by section 1246(a) of the Tax Reform Act of 1986 (1986 Act), as amended by section 1012(s)(1)(A) of the Technical and Miscellaneous Revenue Act of 1988 (1988 Act), and section 7811(i)(6) of the Omnibus Budget Reconciliation Act of 1989 (1989 Act). The regulations will affect partnerships engaged in a trade or business in the United States that have one or more foreign partners. The final regulations also include conforming amendments to sections 871, 1443, 1461, 1462, 1463, 6109, and 6721. This document also contains temporary regulations under section 1446 that may apply to reduce or eliminate a partnership's obligation to pay withholding tax in certain circumstances.
DATES: Effective Date: May 18, 2005.
Applicability Dates: The final and temporary regulations included in this document are applicable to partnership taxable years beginning after May 18, 2005. However, a partnership may elect to apply the provisions of the final regulations to partnership taxable years beginning after December 31, 2004. Further, a partnership may elect to apply the temporary regulations to partnership taxable years beginning after December 31, 2004, provided the partnership also elects to apply the final regulations to partnership taxable years beginning after December 31, 2004.
FOR FURTHER INFORMATION CONTACT: Ronald M. Gootzeit at (202) 622-3860 (not a toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collections of information contained in the final regulations have been reviewed and approved by the Office of Management and Budget in accordance with...