Treasury Regulations (26 C.F.R.)
26 CFR § 1.988-2T
Recognition and computation of exchange gain or loss (temporary).
(a) through (b)(15) [Reserved] For further guidance, see § 1.988-2(a) through (b)(15).
(16) Deferral of loss on certain related-party debt instruments—(i) Treatment of creditor. For rules applicable to a corporation included in a controlled group that is a creditor under a debt instrument see § 1.267(f)-1(e).
(ii) Treatment of debtor—(A) In general. Exchange loss realized under § 1.988-2(b)(4) or (b)(6) is deferred if—
(1) The loss is realized by a debtor with respect to a loan from a person that has a relationship to the debtor described in section 267(b) or section 707(b); and
(2) The transaction resulting in the realization of exchange loss has as a principal purpose the avoidance of Federal income tax.
(B) Recognition of deferred loss. Any exchange loss that is deferred under paragraph (b)(16)(ii)(A) of this section is deferred until the end of the term of the loan, determined immediately prior to the transaction.
(17) through (h) [Reserved] For further guidance, see § 1.988-2(b)(17) through (h).
(i) Special rules for section 988 transactions of a section 987 QBU. For rules regarding section 988 transactions of a section 987 QBU, see § 1.987-3T(b)(4) for section 987 QBUs in general and § 1.987-1T(b)(6) for dollar QBUs.
(j) Effective/applicability date. Paragraph (b)(16) of this section applies to any exchange loss realized on or after December 7, 2016. Paragraph (i) of this section applies to taxable years beginning on or after one year after the first day of the first taxable year following December 7, 2016. Notwithstanding the preceding sentence, if a taxpayer makes an election under § 1.987-11(b), then paragraph (i) of this section applies to taxable years to which §§ 1.987-1 through 1.987-10 apply as a result of such election.
(k) Expiration date. The applicability of this section expires on December 6, 2019.
[T.D. 9795, 81 FR 88879, Dec. 8, 2016]
Source: view the official text
In this part (40 sections)
- 1.987-3 · Determination of section 987 taxable income or loss of an…
- 1.987-3T · Determination of section 987 taxable income or loss of an…
- 1.987-4 · Determination of net unrecognized section 987 gain or loss of…
- 1.987-5 · Recognition of section 987 gain or loss.
- 1.987-6 · Character and source of section 987 gain or loss.
- 1.987-6T · Character and source of section 987 gain or loss (temporary).
- 1.987-7 · Application of the section 987 regulations to partnerships…
- 1.987-8 · Termination of a section 987 QBU.
- 1.987-8T · Termination of a section 987 QBU (temporary).
- 1.987-9 · Recordkeeping requirements.
- 1.987-10 · Transition rules.
- 1.987-11 · Suspended section 987 loss relating to certain elections;…
- 1.987-12 · Deferral of section 987 gain or loss.
- 1.987-13 · Suspended section 987 loss upon terminations.
- 1.987-14 · Section 987 hedging transactions.
- 1.987-15 · Applicability date.
- 1.988-0 · Taxation of gain or loss from a section 988 transaction;…
- 1.988-1 · Certain definitions and special rules.
- 1.988-1T · Certain definitions and special rules (temporary).
- 1.988-2 · Recognition and computation of exchange gain or loss.
- 1.988-2T · Recognition and computation of exchange gain or loss…
- 1.988-3 · Character of exchange gain or loss.
- 1.988-4 · Source of gain or loss realized on a section 988 transaction.
- 1.988-5 · Section 988(d) hedging transactions.
- 1.988-6 · Nonfunctional currency contingent payment debt instruments.
- 1.989(a)-1 · (a)-1 Definition of a qualified business unit.
- 1.989(b)-1 · (b)-1 Definition of weighted average exchange rate.
- 1.991-1 · Taxation of a domestic international sales corporation.
- 1.992-1 · Requirements of a DISC.
- 1.992-2 · Election to be treated as a DISC.
- 1.992-3 · Deficiency distributions to meet qualification requirements.
- 1.992-4 · Coordination with personal holding company provisions in case…
- 1.993-1 · Definition of qualified export receipts.
- 1.993-2 · Definition of qualified export assets.
- 1.993-3 · Definition of export property.
- 1.993-4 · Definition of producer's loans.
- 1.993-5 · Definition of related foreign export corporation.
- 1.993-6 · Definition of gross receipts.
- 1.993-7 · Definition of United States.
- 1.994-1 · Inter-company pricing rules for DISC's.