Treasury Regulations (26 C.F.R.)
26 CFR § 1.904(f)-8
Recapture of separate limitation loss accounts.
# (a) In general.
A taxpayer shall recapture a separate limitation loss account as provided in this section. If the taxpayer has a separate limitation loss account or accounts in any separate category (the “loss category”) and the loss category has income in a subsequent taxable year, the income shall be recharacterized as income in that other category or categories. The amount of income recharacterized shall not exceed the aggregate balance in all separate limitation loss accounts for the loss category as determined under § 1.904(f)-7. If the taxpayer has more than one separate limitation loss account in a loss category, and there is not enough income in the loss category to recapture all of the loss accounts, then separate limitation income in the loss category shall be recharacterized as separate limitation income in the other separate categories on a proportionate basis. This is determined by multiplying the total separate limitation income subject to recharacterization by a fraction, the numerator of which is the amount in a particular separate limitation loss account and the denominator of which is the total amount in all separate limitation loss accounts for the loss category.
# (b) Effect of recharacterization of separate limitation income on associated taxes.
Recharacterization of income under paragraph (a) of this section shall not result in the recharacterization of any tax. The rules of § 1.904-6, including the rules that the taxes are allocated on an annual basis and that foreign taxes paid on U.S. source income shall be allocated to the separate category that includes that U.S. source income (see § 1.904-6(a)), shall apply for purposes of allocating taxes to separate categories. Allocation of taxes pursuant to § 1.904-6 shall be made before the recapture of any separate limitation loss accounts of the taxpayer pursuant to the rules of this section.
# (c) Effective/applicability date.
This section applies to taxpayers that sustain separate limitation losses in taxable years beginning on or after January 1, 2012. Taxpayers may choose to apply this section to separate limitation losses sustained in other taxable years beginning after December 21, 2007, including periods covered by 26 CFR § 1.904(f)-8T (revised as of April 1, 2010). For rules relating to taxable years beginning after December 31, 1986, and on or before December 21, 2007, see section 904(f)(5).
[T.D. 9595, 77 FR 37580, June 22, 2012]
Source: view the official text
In this part (40 sections)
- 1.903-1 · Taxes in lieu of income taxes.
- 1.904-1 · Limitation on credit for foreign income taxes.
- 1.904-2 · Carryback and carryover of unused foreign tax.
- 1.904-3 · Carryback and carryover of unused foreign tax by spouses…
- 1.904-4 · Separate application of section 904 with respect to certain…
- 1.904-5 · Look-through rules as applied to controlled foreign…
- 1.904-6 · Allocation and apportionment of foreign income taxes.
- 1.904-7 · Transition rules.
- 1.904(b)-0 · Outline of regulation provisions.
- 1.904(b)-1 · Special rules for capital gains and losses.
- 1.904(b)-2 · Special rules for application of section 904(b) to…
- 1.904(b)-3 · Disregard of certain dividends and deductions under…
- 1.904(f)-0 · Outline of regulation provisions.
- 1.904(f)-1 · Overall foreign loss and the overall foreign loss account.
- 1.904(f)-2 · Recapture of overall foreign losses.
- 1.904(f)-3 · Allocation of net operating losses and net capital losses.
- 1.904(f)-4 · Recapture of foreign losses out of accumulation…
- 1.904(f)-5 · Special rules for recapture of overall foreign losses of a…
- 1.904(f)-6 · Transitional rule for recapture of FORI and general…
- 1.904(f)-7 · Separate limitation loss and the separate limitation loss…
- 1.904(f)-8 · Recapture of separate limitation loss accounts.
- 1.904(f)-9 - 1.904(f)-11 · §§ 1.904(f)-9-1.904(f)-11 [Reserved]
- 1.904(f)-12 · Transition rules.
- 1.904(g)-0 · Outline of regulation provisions.
- 1.904(g)-1 · Overall domestic loss and the overall domestic loss…
- 1.904(g)-2 · Recapture of overall domestic losses.
- 1.904(g)-3 · Ordering rules for the allocation of net operating losses,…
- 1.904(i)-0 · Outline of regulation provisions.
- 1.904(i)-1 · Limitation on use of deconsolidation to avoid foreign tax…
- 1.904(j)-0 · Outline of regulation provisions.
- 1.904(j)-1 · Certain individuals exempt from foreign tax credit…
- 1.905-1 · When credit for foreign income taxes may be taken.
- 1.905-2 · Conditions of allowance of credit.
- 1.905-3 · Adjustments to U.S. tax liability and to current earnings and…
- 1.905-4 · Notification of foreign tax redetermination.
- 1.905-5 · Foreign tax redeterminations of foreign corporations that…
- 1.907-0 · Outline of regulation provisions for section 907.
- 1.907(a)-0 · Introduction (for taxable years beginning after December…
- 1.907(a)-1 · Reduction in taxes paid on FOGEI (for taxable years…
- 1.907(b)-1 · Reduction of creditable FORI taxes (for taxable years…