Transitional rules for 2007 changes

taxes carried from any taxable year beginning before January 1, 2007 , to any taxable year beginning on or after such date, with respect to any item of income, shall be treated as described in the subparagraph of paragraph (1) in which such income would be described were such taxes paid or accrued in a taxable year beginning on or after such date, and

the Secretary may by regulations provide for the allocation of any carryback of taxes with respect to income from a taxable year beginning on or after January 1, 2007 , to a taxable year beginning before such date for purposes of allocating such income among the separate categories in effect for the taxable year to which carried.