(a) Definitions.—
(1) Eligible RIC.—An eligible RIC is a regulated investment company that offers for sale, or has
outstanding, any stock of which it is the issuer and which is redeemable at net asset value, or that
publishes net asset valuations at least annually.
(2) Section 1296 stock.—The term section 1296 stock means marketable stock in a
passive foreign investment company (PFIC), including any PFIC stock owned directly or indirectly
by an eligible RIC, for which there is a valid section 1296 election. Section 1296 stock does not
include stock of a foreign corporation that previously had been a PFIC, and for which a section
1296 election remains in effect.
(3) Unreversed inclusions.—
(i) General rule.—The term unreversed inclusions means
with respect to any section 1296 stock, the excess, if any, of—
(A) The amount of mark to market gain included in gross income of the United
States person under paragraph (c)(1) of this section with respect to such stock for prior taxable
years; over
(B) The amount allowed as a deduction to the United States person under
paragraph (c)(3) of this section with respect to such stock for prior taxable years.
(ii) Section 1291 adjustment.—The amount referred to in paragraph (a)(3)(i)(A) of
this section shall include any amount subject to section 1291 under the coordination rule of
paragraph (i)(2)(ii) of this section.
(iii) Example.—An example of the computation of unreversed inclusions is as
follows:
Example. A, a United States person, acquired stock in Corp X, a foreign corporation,
on January 1, 2005 for $150. At such time and at all times thereafter, Corp X was a PFIC and A’s
stock in Corp X was marketable. For taxable years 2005 and 2006, Corp X was a nonqualified fund
subject to taxation under section 1291. A made a timely section 1296 election with respect to the X
stock, effective for taxable year 2007. The fair market value of the X stock was $200 as of
December 31, 2006, and $240 as of December 31, 2007. Additionally, Corp X made no distribution
with respect to its stock for the taxable years at issue. In 2007, pursuant to paragraph (i)(2)(ii) of
this section, A must include the $90 gain in the X stock in accordance with the rules of section
1291 for purposes of determining the deferred tax amount and any applicable interest. Nonethe-
less, for purposes of determining the amount of the unreversed inclusions pursuant to paragraph
(a)(3)(ii) of this section, A will include the $90 of gain that was taxed under section 1291 and not
the interest thereon.
(iv) Special rule for regulated investment companies.—In the case of a regulated
investment company which had elected to mark to market the PFIC stock held by such company
as of the last day of the taxable year preceding such company’s first taxable year for which such
company makes a section 1296 election, the amount referred to in paragraph (a)(3)(i)(A) of this
section shall include amounts previously included in gross income by the company pursuant to
such mark to market election with respect to such stock for prior taxable years. For further
guidance, see Notice 92-53 (1992-2 C.B. 384) (see also 601.601(d)(2) of this chapter).
(b) Application of section 1296 election.—
(1) In general.—Any United States person and any
controlled foreign corporation (CFC) that owns directly, or is treated as owning under this section,
marketable stock, as defined in § 1.1296-2, in a PFIC may make an election to mark to market such
stock in accordance with the provisions of section 1296 and this section.
(2) Election applicable to specific United States person.—A section 1296 election applies
only to the United States person (or CFC that is treated as a U.S. person under paragraph (g)(2) of
this section) that makes the election. Accordingly, a United States person’s section 1296 election
will not apply to a transferee of section 1296 stock.
(3) Election applicable to specific corporation only.—A section 1296 election is made with
respect to a single foreign corporation, and thus a separate section 1296 election must be made for
each foreign corporation that otherwise meets the requirements of this section. A United States
persons section 1296 election with respect to stock in a foreign corporation applies to all
marketable stock of the corporation that the person owns directly, or is treated as owning under
paragraph (e) of this section, at the time of the election or that is subsequently acquired.
(c) Effect of election.—
(1) Recognition of gain.—If the fair market value of section 1296 stock
on the last day of the United States person’s taxable year exceeds its adjusted basis, the United
States person shall include in gross income for its taxable year the excess of the fair market value
of such stock over its adjusted basis (mark to market gain).
(2) Character of gain.—Mark to market gain, and any gain on the sale or other disposition
of section 1296 stock, shall be treated as ordinary income.
(3) Recognition of loss.—If the adjusted basis of section 1296 stock exceeds its fair
market value on the last day of the United States persons taxable year, such person shall be
allowed a deduction for such taxable year equal to the lesser of the amount of such excess or the
unreversed inclusions with respect to such stock (mark to market loss).
(4) Character of loss.—
(i) Losses not in excess of unreversed inclusions.—Any mark to
market loss allowed as a deduction under paragraph (c)(3) of this section, and any loss on the sale
or other disposition of section 1296 stock, to the extent that such loss does not exceed the
unreversed inclusions attributable to such stock, shall be treated as an ordinary loss, deductible in
computing adjusted gross income.
(ii) Losses in excess of unreversed inclusions.—Any loss recognized on the sale or
other disposition of section 1296 stock in excess of any prior unreversed inclusions will be subject
to the rules generally applicable to losses provided elsewhere in the Internal Revenue Code and
the regulations thereunder.
(5) Application of election to separate lots of stock.—In the case in which a United States
person purchased or acquired shares of stock in a PFIC at different prices, the rules of this section
shall be applied in a manner consistent with the rules of § 1.1012-1.
(6) Source rules.—The source of any amount included in gross income under paragraph
(c)(1) of this section, or the allocation and apportionment of any amount allowed as a deduction
under paragraph (c)(3) of this section, shall be determined in the same manner as if such amounts
were gain or loss (as the case may be) from the sale of stock in the PFIC.
(7) Examples.—The following examples illustrate this paragraph (c):
Example 1. Treatment of gain as ordinary income. A, a United States individual,
purchases stock in FX, a foreign corporation that is not a PFIC, in 1990 for $1,000. On January 1,
2005, when the fair market value of the FX stock is $1,100, FX becomes a PFIC. A makes a timely
section 1296 election for taxable year 2005. On December 31, 2005, the fair market value of the FX
stock is $1,200. For taxable year 2005, A includes $200 of mark to market gain (the excess of the
fair market value of FX stock ($1,200) over A’s adjusted basis ($1,000)) in gross income as
ordinary income and pursuant to paragraph (d)(1) of this section increases his basis in the FX
stock by that amount.
Example 2. Treatment of gain as capital gain. The facts are the same as in Example 1. For
taxable year 2006, FX does not satisfy either the asset test or the income test of section 1297(a). A
does not revoke the section 1296 election it made with respect to the FX stock. On December 1,
2006, A sells the FX stock when the fair market value of the stock is $1,500. For taxable year 2006,
A includes $300 of gain (the excess of the fair market value of FX stock ($1,500) over A’s adjusted
basis ($1,200)) in gross income as long-term capital gain because at the time of sale of the FX
stock by A, FX did not qualify as a PFIC, and, therefore, the FX stock was not section 1296 stock at
the time of the disposition. Further, A’s holding period for non-PFIC purposes was more than one
year.
Example 3. Treatment of losses as ordinary where they do not exceed unreversed inclusions.
The facts are the same as in Example 1. On December 1, 2006, A sells the stock in FX for $1,100.
At that time, A’s unreversed inclusions (the amount A included in income as mark to market gain)
with respect to the stock in FX are $200. Accordingly, for taxable year 2006, A recognizes a loss on
the sale of the FX stock of $100, (the fair market value of the FX stock ($1,100) minus A’s adjusted
basis ($1,200) in the stock) that is treated as an ordinary loss because the loss does not exceed the
unreversed inclusions attributable to the stock of FX.
Example 4. Treatment of losses as long-term capital losses. The facts are the same as in
Example 3, except that FX does not satisfy either the asset test or the income test of section
1297(a) for taxable year 2006. For taxable year 2006, A’s $100 loss from the sale of the FX stock is
treated as long-term capital loss because at the time of the sale of the FX stock by A FX did not
qualify as a PFIC, and, therefore, the FX stock was not section 1296 stock at the time of the
disposition. Further, A’s holding period in the FX stock for non-PFIC purposes was more than one
year.
Example 5. Long-term capital loss treatment of losses in excess of unreversed inclusions. The
facts are the same as in Example 3, except that A sells his FX stock for $900. At the time of A’s sale
of the FX stock on December 1, 2006, A’s unreversed inclusions with respect to the FX stock are
$200. Accordingly, the $300 loss recognized by A on the disposition is treated as an ordinary loss
to the extent of his unreversed inclusions ($200). The amount of the loss in excess of A’s
unreversed inclusions ($100) will be treated as a long-term capital loss because A’s holding period
in the FC stock for non-PFIC purposes was more than one year.
Example 6. Application of section 1296 election to separate lots of stock. On January 1,
2005, Corp A, a domestic corporation, purchased 100 shares (first lot) of stock in FX, a PFIC, for
$500 ($5 per share). On June 1, 2005, Corp A purchased 100 shares (second lot) of FX stock for
$1,000 ($10 per share). Corp A made a timely section 1296 election with respect to its FX stock for
taxable year 2005. On December 31, 2005, the fair market value of FX stock was $8 per share. For
taxable year 2005, Corp A includes $300 of gain in gross income as ordinary income under
paragraph (c)(1) of this section with respect to the first lot, and adjusts its basis in that lot to $800
pursuant to paragraph (d)(1) of this section. With respect to the second lot, Corp A is not
permitted to recognize a loss under paragraph (c)(3) of this section for taxable year 2005.
Although Corp A’s adjusted basis in that stock exceeds its fair market value by $200, Corp A has
no unreversed inclusions with respect to that particular lot of stock. On July 1, 2006, Corp A sells
100 shares of FX stock for $900. Assuming that Corp A adequately identifies (in accordance with
the rules of § 1.1012-1(c)) the shares of FX stock sold as being from the second lot, Corp A
recognizes $100 of long term capital loss pursuant to paragraph (c)(4)(ii) of this section.
(d) Adjustment to basis.—(1) Stock held directly.—The adjusted basis of the section 1296
stock shall be increased by the amount included in the gross income of the United States person
under paragraph (c)(1) of this section with respect to such stock, and decreased by the amount
allowed as a deduction to the United States person under paragraph (c)(3) of this section with
respect to such stock.
(2) Stock owned through certain foreign entities.—
(i) In the case of section 1296 stock
that a United States person is treated as owning through certain foreign entities pursuant to
paragraph (e) of this section, the basis adjustments under paragraph (d)(1) of this section shall
apply to such stock in the hands of the foreign entity actually holding such stock, but only for
purposes of determining the subsequent treatment under chapter 1 of the Internal Revenue Code
of the United States person with respect to such stock. Such increase or decrease in the adjusted
basis of the section 1296 stock shall constitute an adjustment to the basis of partnership property
only with respect to the partner making the section 1296 election. Corresponding adjustments
shall be made to the adjusted basis of the United States person’s interest in the foreign entity and
in any intermediary entity described in paragraph (e) of this section through which the United
States person holds the PFIC stock.
(ii) Example.—The following example illustrates this paragraph (d)(2):
Example. FP is a foreign partnership. Corp A, a domestic corporation, owns a 20
percent interest in FP. Corp B, a domestic corporation, owns a 30 percent interest in FP. Corp C, a
foreign corporation, with no direct or indirect shareholders that are U.S. persons, owns a 50%
interest in FP. Corp A, Corp B, and FP all use a calendar year for their taxable year. In 2005, FP
purchases stock in FX, a foreign corporation and a PFIC, for $1,000. Corp A makes a timely
section 1296 election for taxable year 2005. On December 31, 2005, the fair market value of the
PFIC stock is $1,100. Corp A includes $20 of ordinary income in taxable year 2005 under
paragraphs (c)(1) and (2) of this section. Corp A increases its basis in its FP partnership interest
by $20. FP increases its basis in the FX stock to $1,020 solely for purposes of determining the
subsequent treatment of Corp A, under chapter 1 of the Internal Revenue Code, with respect to
such stock. In 2006, FP sells the FX stock for $1,200. For purposes of determining the amount of
gain of Corp A, FP will be treated as having $180 in gain of which $20 is allocated to Corp A. Corp
A’s $20 of gain will be treated as ordinary income under paragraph (c)(2) of this section. For
purposes of determining the amount of gain attributable to Corp B, FP will be treated as having
$200 gain, $60 of which will be allocated to Corp B.
(3) Stock owned indirectly by an eligible RIC.—Paragraph (d)(2) of this section shall also
apply to an eligible RIC which is an indirect shareholder under § 1.1296-2(f) of stock in a PFIC and
has a valid section 1296 election in effect with respect to the PFIC stock.
(4) Stock acquired from a decedent.—In the case of stock of a PFIC which is acquired by
bequest, devise, or inheritance (or by the decedent’s estate) and with respect to which a section
1296 election was in effect as of the date of the decedent’s death, notwithstanding section 1014, the
basis of such stock in the hands of the person so acquiring it shall be the adjusted basis of such
stock in the hands of the decedent immediately before his death (or, if lesser, the basis which
would have been determined under section 1014 without regard to this paragraph).
(5) Transition rule for individuals becoming subject to United States income taxation.—
(i) In general.—If any individual becomes a United States person in a taxable year beginning after
December 31, 1997, solely for purposes of this section, the adjusted basis, before adjustments
under this paragraph (d), of any section 1296 stock owned by such individual on the first day of
such taxable year shall be treated as being the greater of its fair market value or its adjusted basis
on such first day.
(ii) An example of the transition rule for individuals becoming subject to United
States income taxation is as follows:
Example. A, a nonresident alien individual, purchases marketable stock in FX, a
PFIC, for $50 in 1995. On January 1, 2005, A becomes a United States person and makes a timely
section 1296 election with respect to the stock in accordance with paragraph (h) of this section.
The fair market value of the FX stock on January 1, 2005, is $100. The fair market value of the FX
stock on December 31, 2005, is $110. Under paragraph (d)(5)(i) of this section, A computes the
amount of mark to market gain or loss for the FX stock in 2005 by reference to an adjusted basis of
$100, and therefore A includes $10 in gross income as mark to market gain under paragraph
(c)(1) of this section. Additionally, under paragraph (d)(1) of this section, A’s adjusted basis in the
FX stock for purposes of this section is increased to $110 (and to $60 for all other tax purposes). A
sells the FX stock in 2006 for $120. For purposes of applying section 1001, A must use its original
basis of $50, with any adjustments under paragraph (d)(1) of this section, $10 in this case, and
therefore A recognizes $60 of gain. Under paragraph (c)(2) of this section (which is applied using
an adjusted basis of $110), $10 of such gain is treated as ordinary income. The remaining $50 of
gain from the sale of the FX stock is long term capital gain because A held such stock for more
than one year.
(e) Stock owned through certain foreign entities.—
(1) In general.—Except as provided in
paragraph (e)(2) of this section, the following rules shall apply in determining stock ownership for
purposes of this section. PFIC stock owned, directly or indirectly, by or for a foreign partnership,
foreign trust (other than a foreign trust described in sections 671 through 679), or foreign estate
shall be considered as being owned proportionately by its partners or beneficiaries. PFIC stock
owned, directly or indirectly, by or for a foreign trust described in sections 671 through 679 shall
be considered as being owned proportionately by its grantors or other persons treated as owners
under sections 671 through 679 of any portion of the trust that includes the stock. The determina-
tion of a person’s proportionate interest in a foreign partnership, foreign trust or foreign estate will
be made on the basis of all the facts and circumstances. Stock considered owned by reason of this
paragraph shall, for purposes of applying the rules of this section, be treated as actually owned by
such person.
(2) Stock owned indirectly by eligible RICs.—The rules for attributing ownership of stock
contained in § 1.1296-2(f) will apply to determine the indirect ownership of PFIC stock by an
eligible RIC.
(f) Holding period.—Solely for purposes of sections 1291 through 1298, if section 1296 applied
to stock with respect to the taxpayer for any prior taxable year, the taxpayer’s holding period in
such stock shall be treated as beginning on the first day of the first taxable year beginning after
the last taxable year for which section 1296 so applied.
(g) Special rules.—
(1) Certain dispositions of stock.—To the extent a United States person is
treated as actually owning stock in a PFIC under paragraph (e) of this section, any disposition
which results in the United States person being treated as no longer owning such stock, and any
disposition by the person owning such stock, shall be treated as a disposition by the United States
person of the stock in the PFIC.
(2) Treatment of CFC as a United States person.—In the case of a CFC that owns, or is
treated as owning under paragraph (e) of this section, section 1296 stock:
(i) Other than with respect to the sourcing rules in paragraph (c)(6) of this section,
this section shall apply to the CFC in the same manner as if such corporation were a United States
person. The CFC will be treated as a foreign person for purposes of applying the source rules of
paragraph (c)(6).
(ii) For purposes of subpart F of part III of subchapter N of the Internal Revenue
Code—
(A) Amounts included in the CFC’s gross income under paragraph (c)(1) or
(i)(2)(ii) of this section shall be treated as foreign personal holding company income under
section 954(c)(1)(A); and
(B) Amounts allowed as a deduction under paragraph (c)(3) of this section
shall be treated as a deduction allocable to foreign personal holding company income for purposes
of computing net foreign base company income under § 1.954-1(c).
(iii) A United States shareholder, as defined in section 951(b), of the CFC shall not
be subject to section 1291 with respect to any stock of the PFIC for the period during which the
section 1296 election is in effect for that stock, and the holding period rule of paragraph (f) of this
section shall apply to such United States shareholder.
(iv) The rules of this paragraph (g)(2) shall not apply to a United States person that
is a shareholder of the PFIC for purposes of section 1291, but is not a United States shareholder
under section 951(b) with respect to the CFC making a section 1296 election.
(3) Timing of inclusions for stock owned through certain foreign entities.—In the case of
section 1296 stock that a United States person is treated as owning through certain foreign entities
pursuant to paragraph (e) of this section, the mark to market gain or mark to market loss is
determined in accordance with paragraphs (c) and (i)(2)(ii) of this section as of the last day of the
taxable year of the foreign partnership, foreign trust or foreign estate and then included in the
taxable year of such United States person that includes the last day of the taxable year of the
entity.
(h) Elections.—
(1) Timing and manner for making a section 1296 election.—
(i) United States persons.—A United States person that owns marketable stock in a PFIC, or is treated as owning
marketable stock under paragraph (e) of this section, on the last day of the taxable year of such
person, and that wants to make a section 1296 election, must make a section 1296 election for such
taxable year on or before the due date (including extensions) of the United States person’s income
tax return for that year. The section 1296 election must be made on the Form 8621, “Return by a
Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund , included with
the original tax return of the United States person for that year, or on an amended return,
provided that the amended return is filed on or before the election due date.
(ii) Controlled foreign corporations.—A section 1296 election by a CFC shall be made
by its controlling United States shareholders, as defined in § 1.964-1(c)(5), and shall be included
with the Form 5471, “Information Return of U.S. Persons With Respect To Certain Foreign
Corporations , for that CFC by the due date (including extensions) of the original income tax
returns of the controlling United States shareholders for that year. A section 1296 election by a
CFC shall be binding on all United States shareholders of the CFC.
(iii) Retroactive elections for PFIC stock held in prior years.—A late section 1296
election may be permitted only in accordance with § 301.9100 of this chapter.
(2) Effect of section 1296 election.—
(i) A section 1296 election will apply to the taxable
year for which such election is made and remain in effect for each succeeding taxable year unless
such election is revoked or terminated pursuant to paragraph (h)(3) of this section.
(ii) Cessation of a foreign corporation as a PFIC.—A United States person will not
include mark to market gain or loss pursuant to paragraph (c) of this section with respect to any
stock of a foreign corporation for any taxable year that such foreign corporation is not a PFIC
under section 1297 or treated as a PFIC under section 1298(b)(1) (taking into account the holding
period rule of paragraph (f) of this section). Cessation of a foreign corporation’s status as a PFIC
will not, however, terminate a section 1296 election. Thus, if a foreign corporation is a PFIC in a
taxable year after a year in which it is not treated as a PFIC, the United States person’s original
election (unless revoked or terminated in accordance with paragraph (h)(3) of this section)
continues to apply and the shareholder must include any mark to market gain or loss in such year.
(3) Revocation or termination of election.—
(i) In general.—A United States person’s
section 1296 election is terminated if the section 1296 stock ceases to be marketable; if the United
States person elects, or is required, to mark to market the section 1296 stock under another
provision of chapter 1 of the Internal Revenue Code; or if the Commissioner, in the Commis-
sioner’s discretion, consents to the United States person’s request to revoke its section 1296
election upon a finding of a substantial change in circumstances. A substantial change in
circumstances for this purpose may include a foreign corporation ceasing to be a PFIC.
(ii) Timing of termination or revocation.—Where a section 1296 election is terminated
automatically (e.g., the stock ceases to be marketable), section 1296 will cease to apply
beginning with the taxable year in which such termination occurs. Where a section 1296 election
is revoked with the consent of the Commissioner, section 1296 will cease to apply beginning with
the first taxable year of the United States person after the revocation is granted unless otherwise
provided by the Commissioner.
(4) Examples.—The operation of the rules of this paragraph (h) is illustrated by the
following examples:
Example 1. A, a United States person, owns stock in FX, a PFIC. A makes a QEF election
in 1996 with respect to the FX stock. For taxable year 2005, A makes a timely section 1296 election
with respect to its stock, and thus its QEF election is automatically terminated pursuant to
§ 1.1295-1(i)(3). In 2006, A’s stock in FX ceases to be marketable, and therefore its section 1296
election is automatically terminated under paragraph (h)(3) of this section. Beginning with taxable
year 2006, A is subject to the rules of section 1291 with respect to its FX stock unless it makes a
new QEF election. See § 1.1295-1(i)(5).
Example 2. The facts are the same as in Example 1, except that A’s stock in FX becomes
marketable again in 2007. A may make a new section 1296 election with respect to the FX stock for
its taxable year 2007, or thereafter. A will be subject to the coordination rules under paragraph (i)
of this section unless it made a new QEF election in 2006.
(i) Coordination rules for first year of election.—
(1) In general.—Notwithstanding any provision in this section to the contrary,
the rules of this paragraph (i) shall apply to the first taxable
year in which a section 1296 election is effective with respect to marketable stock of a PFIC if such
foreign corporation was a PFIC for any taxable year, prior to such first taxable year, during the
United States person’s holding period (as defined in paragraph (f) of this section) in such stock,
and for which such corporation was not treated as a QEF with respect to such United States
person.
(2) Shareholders other than regulated investment companies.—For the first taxable year of
a United States person (other than a regulated investment company) for which a section 1296
election is in effect with respect to the stock of a PFIC, such United States person shall, in lieu of
the rules of paragraphs (c) and (d) of this section—
(i) Apply the rules of section 1291 to any distributions with respect to, or disposition
of, section 1296 stock;
(ii) Apply section 1291 to the amount of the excess, if any, of the fair market value of
such section 1296 stock on the last day of the United States person’s taxable year over its adjusted
basis, as if such amount were gain recognized from the disposition of stock on the last day of the
taxpayer’s taxable year; and
(iii) Increase its adjusted basis in the section 1296 stock by the amount of excess, if
any, subject to section 1291 under paragraph (i)(2)(ii) of this section.
(3) Shareholders that are regulated investment companies.—For the first taxable year of a
regulated investment company for which a section 1296 election is in effect with respect to the
stock of a PFIC, such regulated investment company shall increase its tax under section 852 by
the amount of interest that would have been imposed under section 1291(c)(3) for such taxable
year if such regulated investment company were subject to the rules of paragraph (i)(2) of this
section, and not this paragraph (i)(3). No deduction or increase in basis shall be allowed for the
increase in tax imposed under this paragraph (i)(3).
(4) The operation of the rules of this paragraph (i) is illustrated by the following
examples:
Example (1). A, a United States person and a calendar year taxpayer, owns marketable
stock in FX, a PFIC that it acquired on January 1, 1992. At all times, A’s FX stock was a
nonqualified fund subject to taxation under section 1291. A made a timely section 1296 election
effective for taxable year 2005. At the close of taxable year 2005, the fair market value of A’s FX
stock exceeded its adjusted basis by $10. Pursuant to paragraph (i)(2)(ii) of this section, A must
treat the $10 gain under section 1291 as if the FX stock were disposed of on December 31, 2005.
Further, A increases its adjusted basis in the FX stock by the $10 in accordance with paragraph
(i)(2)(iii) of this section.
Example (2). Assume the same facts as in Example (1), except that A is a RIC that had
not made an election prior to 2005 to mark to market the PFIC stock. In taxable year 2005, A
includes $10 of ordinary income under paragraph (c)(1) of this section, and such amount is not
subject to section 1291. A also increases its tax imposed under section 852 by the amount of
interest that would have been determined under section 1291(c)(3), and no deduction is permitted
for such amount. Finally, under paragraph (d)(1) of this section, A increases its adjusted basis in
the FX stock by $10.
(j) Effective date.—The provisions in this section are applicable for taxable years beginning
on or after May 3, 2004. [Reg. § 1.1296-1.]
[T.D. 9123, 4-30-2004.]