Chester F. and Faye L. Sidell - Page 25

                                       - 25 -                                         

          regulations are silent as to whether the activities of a C                  
          corporation are attributable to the corporation's shareholders.             
          Contrary to petitioners' assertion, the silence of the proposed             
          regulations on this subject cannot be equated to providing                  
          petitioners with relief from the attribution rules set forth in the         
          final regulations.  Simply put, the proposed regulations' silence           
          means nothing, not something.  Moreover, the rule of nonattribution         
          set forth in the temporary regulations issued in 1989 is not                
          relevant because the relief afforded petitioners under the                  
          transitional rules is based solely on the rules set forth in the            
          proposed regulations of 1992, not in the temporary regulations.             
               We are mindful that:                                                   
               (1)  The 1992 proposed regulations eliminated the specific             
          statement found in section 1.469-4T(b)(2)(ii)(B), Temporary Income          
          Tax Regs., 54 Fed. Reg. 20527, 20543 (May 12, 1989), T.D. 8253,             
          1989-1 C.B. 121, 139 (the second set of temporary regulations),             
          which stated:                                                               
                    For purposes of applying section 469 and the                      
               regulations thereunder, a taxpayer's activities do not                 
               include operations that the taxpayer conducts through one              
               or more entities (other than passthrough entities).                    
               (2) The preamble to the 1992 proposed regulations states:              
                         This document proposes to replace section                    
                    1.469-4T with a new section 1.469-4, which                        
                    will provide a modified definition of the term                    

Page:  Previous  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  Next

Last modified: May 25, 2011