§ 1.245A-6. Coordination of extraordinary disposition and disqualified basis rules.

¶(a) Scope. This section and §§ 1.245A-7 through 1.245A-11 coordinate the application of the extraordinary disposition rules of § 1.245A-5(c) and (d) and the disqualified basis rule of § 1.951A-2(c)(5). Section 1.245A-7 provides coordination rules for simple cases, and § 1.245A-8 provides coordination rules for complex cases. Section 1.245A-9 provides definitions and other rules, including rules of general applicability for purposes of this section and §§ 1.245A-7 through 1.245A-11. Section 1.245A-10 provides examples illustrating the application of this section and §§ 1.245A-7 through 1.245A-9. Section 1.245A-11 provides applicability dates.

¶(b) Conditions to apply coordination rules for simple cases. For a taxable year of a section 245A shareholder for which the conditions described in paragraphs (b)(1) and (2) of this section are satisfied, the section 245A shareholder may apply the coordination rules of § 1.245A-7 (rules for simple cases) to an extraordinary disposition account of the section 245A shareholder with respect to an SFC and disqualified basis of an item of specified property that corresponds to the extraordinary disposition account (as determined pursuant to § 1.245A-9(b)(1)). If the conditions are not satisfied, then the coordination rules of § 1.245A-8 (rules for complex cases) apply beginning with the first day of the first taxable year of the section 245A shareholder for which the conditions are not satisfied and all taxable years thereafter. If the conditions are satisfied for a taxable year of the section 245A shareholder but the section 245A shareholder chooses not to apply the coordination rules of § 1.245A-7 for that taxable year, then the coordination rules of § 1.245A-8 apply to that taxable year (though, for a subsequent taxable year, the section 245A shareholder may apply the coordination rules of § 1.245A-7, provided that the conditions described in paragraphs (b)(1) and (2) of this section are satisfied for such subsequent taxable year and have been satisfied for all earlier taxable years). For purposes of applying paragraphs (b)(1) and (2) of this section, a reference to a section 245A shareholder, an SFC, or a CFC does not include a successor of the section 245A shareholder, the SFC, or the CFC, respectively.