other · IRS · Rule · Published 2013-03-25 · Effective 2013-03-25 · 78 FR 17868
Document
Document number
2013-06703
Federal Register citation
78 FR 17868
CFR reference
26 CFR 1
Type
Rule
Action
Correcting amendment.
Category
other
Sub-agency
IRS
Publication date
2013-03-25
Effective date
2013-03-25
Treasury docket
TD 9612
Abstract
This document contains corrections to final regulations (TD 9612) that were published in the Federal Register on Tuesday, February 5, 2013 (78 FR 7997) relating to the tax treatment of noncompensatory options and convertible instruments issued by a partnership. The final regulations generally provide that the exercise of a noncompensatory option does not cause the recognition of immediate income or loss by either the issuing partnership or the option holder. The final regulations also modify the regulations under section 704(b) regarding the maintenance of the partners' capital accounts and the determination of the partners' distributive shares of partnership items. The final regulations also contain a characterization rule providing that the holder of a noncompensatory option is treated as a partner under certain circumstances.