26 CFR §1.367(b)-9

1. (a)Scope. This section applies to a foreign section 381 transaction (as defined in § 1.367(b)-7(a)) either—
   1. (1)That is described in section 368(a)(1)(F); or
   2. (2)That involves—
      1. (i)At least one foreign corporation that holds no property and has no tax attributes immediately before the transaction, other than a nominal amount of assets (and related tax attributes) to facilitate its organization or preserve its existence as a corporation; and
      2. (ii)No more than one foreign corporation that holds more than a nominal amount of property or has more than a nominal amount of tax attributes immediately before the transaction.
2. (b)Hovering deficit rules inapplicable. If a transaction is described in paragraph (a) of this section, a foreign surviving corporation shall succeed to earnings and profits, deficits in earnings and profits, and foreign income taxes without regard to the hovering deficit rules of § 1.367(b)-7(d)(2), (e)(1)(iii), and (e)(2)(iii).
3. (c)Foreign divisive transactions. [Reserved]
4. (d)Examples. The following examples illustrate the principles of this section:
5. (e)Effective date. This section shall apply to section 367(b) transactions that occur on or after November 6, 2006.