Code of Federal Regulations Title 26. Internal Revenue § 26.1.706–2T Temporary regulations;  question and answer under the Tax Reform Act of 1984

Question 1:  For purposes of section 706(d), how is an otherwise deductible amount that is deferred under section 267(a)(2) treated?

Answer 1:  In the year the deduction is allowed, the deduction will constitute an allocable cash basis item under section 706(d)(2)(B)(iv).

(Authority:  Secs. 267(f)(2)(B), 706(d)(2)(B)(iv), 1502, and 7805, Internal Revenue Code of 1954 (98 Stat. 704, 26 U.S.C. 267;  98 Stat. 589, 26 U.S.C. 706;  68A Stat. 367, 26 U.S.C. 1502;  68A Stat. 917, 26 U.S.C. 7805))