26 U.S.C. § 985
Functional currency
# (a) In general
Unless otherwise provided in regulations, all determinations under this subtitle shall be made in the taxpayer’s functional currency.
# (b) Functional currency
(1) In general For purposes of this subtitle, the term “functional currency” means— (A) except as provided in subparagraph (B), the dollar, or (B) in the case of a qualified business unit, the currency of the economic environment in which a significant part of such unit’s activities are conducted and which is used by such unit in keeping its books and records.
(2) Functional currency where activities primarily conducted in dollars The functional currency of any qualified business unit shall be the dollar if activities of such unit are primarily conducted in dollars.
(3) Election To the extent provided in regulations, the taxpayer may elect to use the dollar as the functional currency for any qualified business unit if— (A) such unit keeps its books and records in dollars, or (B) the taxpayer uses a method of accounting that approximates a separate transactions method. Any such election shall apply to the taxable year for which made and all subsequent taxable years unless revoked with the consent of the Secretary.
(4) Change in functional currency treated as a change in method of accounting Any change in the functional currency shall be treated as a change in the taxpayer’s method of accounting for purposes of section 481 under procedures to be established by the Secretary.
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Cited by 17
- 26 CFR § 1.1502-80 — Applicability of other provisions of law.
- 26 CFR § 1.245A(e)-1 — Special rules for hybrid dividends.
- 26 CFR § 1.367(b)-0 — Table of contents.
- 26 CFR § 1.367(b)-2 — Definitions and special rules.
- 26 CFR § 1.6038-2 — Information returns required of United States persons with respect to annual accounting periods of certain foreign corporations.
- 26 CFR § 1.960-1 — Overview, definitions, and computational rules for determining foreign income taxes deemed paid under section 960(a), (b), and (d).
- 26 CFR § 1.964-1 — Determination of the earnings and profits of a foreign corporation.
- 26 CFR § 1.985-1 — Functional currency.
- 26 CFR § 1.985-2 — Election to use the United States dollar as the functional currency of a QBU.
- 26 CFR § 1.986(a)-1 — Translation of foreign income taxes for purposes of the foreign tax credit.
- 26 CFR § 1.987-2 — Attribution of items to eligible QBUs; definition of a transfer and related rules.
- 26 CFR § 1.988-1 — Certain definitions and special rules.
Show 5 more
- 26 CFR § 1.988-4 — Source of gain or loss realized on a section 988 transaction.
- 26 CFR § 4.954-1 — Foreign base company income; taxable years beginning after December 31, 1986.
- 26 CFR § 4.954-2 — Foreign personal holding company income; taxable years beginning after December 31, 1986.
- 26 CFR § 58.4501-7 — Special rules for acquisitions or repurchases of stock of certain foreign corporations.
- 26 U.S.C. § 856 — Definition of real estate investment trust
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