81 FR 88882 - Recognition and Deferral of Section 987 Gain or Loss
DEPARTMENT OF THE TREASURY
Internal Revenue Service Federal Register Volume 81, Issue 236 (December 8, 2016)
Internal Revenue Service
Federal Register Volume 81, Issue 236 (December 8, 2016)
| Page Range | 88882-88884 | |
| FR Document | 2016-28377 |
[Federal Register Volume 81, Number 236 (Thursday, December 8, 2016)] [Proposed Rules] [Pages 88882-88884] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-28377] [[Page 88881]] Vol. 81 Thursday, No. 236 December 8, 2016 Part V Department of the Treasury ----------------------------------------------------------------------- Internal Revenue Service ----------------------------------------------------------------------- 26 CFR Part 1 Recognition and Deferral of Section 987 Gain or Loss; Proposed Rule Federal Register / Vol. 81 , No. 236 / Thursday, December 8, 2016 / Proposed Rules [[Page 88882]] ----------------------------------------------------------------------- DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [REG-128276-12] RIN 1545-BL11 Recognition and Deferral of Section 987 Gain or Loss AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking by cross-reference to temporary regulations. ----------------------------------------------------------------------- SUMMARY: Published elsewhere in this issue of the Federal Register, the Treasury Department and the IRS are issuing temporary regulations under section 987 of the Code relating to the recognition and deferral of foreign currency gain or loss under section 987 with respect to a qualified business unit (QBU) in connection with certain QBU terminations and certain other transactions involving partnerships. The temporary regulations also contain rules providing: An annual deemed termination election for a section 987 QBU; an elective method, available to taxpayers that make the annual deemed termination election, for translating all items of income or loss with respect to a section 987 QBU at the yearly average exchange rate; rules regarding the treatment of section 988 transactions of a section 987 QBU; rules regarding QBUs with the U.S. dollar as their functional currency; rules regarding combinations and separations of section 987 QBUs; rules regarding the translation of income used to pay creditable foreign income taxes; and rules regarding the allocation of assets and liabilities of certain partnerships for purposes of section 987. Finally, the temporary regulations contain rules under section 988 requiring the deferral of certain section 988 loss that arises with respect to related-party loans. The text of the temporary regulations serves as the text of these proposed regulations. DATES: Written or electronic comments and requests for a public hearing must be received by March 8, 2017. ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-128276-12), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG- 128276-12), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, DC, or sent electronically via the Federal eRulemaking Portal at http://www.regulations.gov (IRS REG-128276-12). FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Steven D. Jensen at (202) 317-6938; concerning submissions of comments or requests for a public hearing, Regina Johnson, (202) 317-6901 (not toll-free numbers). SUPPLEMENTARY INFORMATION: Paperwork Reduction Act The collection of information contained in this notice of proposed rulemaking has been submitted to the Office of Management and Budget for review in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). Comments on the collection of information should be sent to the Office of Management and Budget, Attn: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503, with copies to the Internal Revenue Service, Attn: IRS Reports Clearance Officer, SE:CAR:MP:T:T:SP, Washington, DC 20224. Comments on the collection of information should be received by February 6, 2017. Comments are specifically requested concerning: Whether the proposed collection of information is necessary for the proper performance of the Internal Revenue Service, including whether the information will have practical utility; The accuracy of the estimated burden associated with the proposed collection of information (see below); How the quality, utility, and clarity of the information to be collected may be enhanced; How the burden of complying with the proposed collection of information may be minimized, including through the application of automated collection techniques or other forms of information technology; and Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of service to provide information. The collection of information in this proposed regulation is in: (1) Sec. Sec. 1.987-1(b)(6)(iii)(A) and 1.987-1(g)(3)(i)(E); (2) Sec. Sec. 1.987-3(b)(4)(iii)(C) and 1.987-1(g)(3)(i)(F); (3) Sec. Sec. 1.987-3(d) and 1.987-1(g)(3)(i)(G); and (4) Sec. Sec. 1.987-8(d) and 1.987-1(g)(3)(i)(H). Sections 1.987-1(b)(6)(iii)(A) and 1.987-1(g)(3)(i)(E) allow a controlled foreign corporation to elect to apply section 987 and the regulations thereunder (with certain exceptions) to a dollar QBU. Sections 1.987-3(b)(4)(iii)(C) and 1.987- 1(g)(3)(i)(F) allow a taxpayer to elect to apply a foreign currency mark-to-market method of accounting for qualified short-term section 988 transactions. Sections 1.987-3(d) and 1.987-1(g)(3)(i)(G) allow a taxpayer to elect to translate all items of income, gain, deduction, and loss of the section 987 QBU at the yearly average exchange rate. Sections 1.987-8(d) and 1.987-1(g)(3)(i)(H) allow a taxpayer to elect to deem all of its section 987 QBUs to terminate on the last day of each taxable year. The preceding elections are to be made pursuant to Sec. 1.987-1(g). The collection of information is voluntary to obtain a benefit. The likely respondents are business or other for-profit institutions. Estimated total annual reporting burden: 1,000 hours. Estimated average annual burden hours per respondent: 1 hour. Estimated number of respondents: 1,000. Estimated annual frequency of responses: On occasion. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by the Office of Management and Budget. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103. Background and Explanation of Provisions The temporary regulations (published in the Rules and Regulations section of this issue of the Federal Register) contain rules relating to the recognition and deferral of section 987 gain or loss with respect to a QBU. The temporary regulations also contain rules regarding an annual deemed termination election, an elective method for translating taxable income or loss with respect to a QBU, section 988 transactions of a section 987 QBU, QBUs with the U.S. dollar as their functional currency, combinations and separations of section 987 QBUs, translation of income used to pay creditable foreign income taxes, the allocation of assets and liabilities of certain partnerships for purposes of section 987, and the deferral of section 988 loss with respect to certain related-party loans. The text of the temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations [[Page 88883]] explains those regulations and these proposed regulations. Special Analyses Certain IRS regulations, including these, are exempt from the requirements of Executive Order 12866, as supplemented and reaffirmed by Executive Order 13563. Therefore, a regulatory impact assessment is not required. It is hereby certified that these regulations will not have a significant economic impact on a substantial number of small entities within the meaning of section 601(6) of the Regulatory Flexibility Act (5 U.S.C. chapter 6). Accordingly, a regulatory flexibility analysis is not required. This certification is based on the fact that these regulations will primarily affect U.S. corporations that have foreign operations, which tend to be larger businesses. Pursuant to section 7805(f) of the Code, these regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business. Comments and Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any comments that are submitted timely to the IRS as prescribed in this preamble under the Addresses heading. The Treasury Department and the IRS request comments on all aspects of the proposed rules. In addition, the Treasury Department and the IRS request comments on the application of section 987 to entities and QBUs described in Sec. 1.987-1(b)(1)(ii) to which the final regulations are not applicable (excluded entities and QBUs). Comments are requested on whether the Treasury Department and the IRS should issue regulations applying the foreign exchange exposure pool methodology described in Sec. Sec. 1.987-3 and -4 to excluded entities and QBUs. Comments are also requested on the modifications, if any, that should be made to the foreign exchange exposure pool methodology adopted in the final regulations with respect to excluded entities and QBUs. All comments will be available at www.regulations.gov or upon request. A public hearing will be scheduled if requested in writing by any person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place for the hearing will be published in the Federal Register. Drafting Information The principal author of these regulations is Mark E. Erwin of the Office of Associate Chief Counsel (International). However, other personnel from the IRS and the Treasury Department participated in their development. List of Subjects Income taxes, Reporting and recordkeeping requirements. Proposed Amendments to the Regulations Accordingly, 26 CFR part 1, as amended elsewhere in this issue of the Federal Register, is proposed to be further amended as follows: PART 1--INCOME TAXES 0 Paragraph 1. The authority citation for part 1 continues to read in part as follows: Authority: 26 U.S.C. 985, 987, 989(c) and 7805 * * * 0 Par. 2. Section 1.987-1 is amended by adding paragraphs (b)(1)(iii), (b)(6), (c)(1)(ii)(B), (c)(3)(i)(E), (d)(3), (f), (g)(2)(i)(B) and (C), and (g)(3)(i)(E) through (H) to read as follows: Sec. 1.987-1 Scope, definitions, and special rules. * * * * * (b) * * * (1) * * * (iii) [The text of the proposed amendment to Sec. 1.987- 1(b)(1)(iii) is the same as the text of Sec. 1.987-1T(b)(1)(iii) published elsewhere in this issue of the Federal Register]. * * * * * (6) [The text of the proposed amendment to Sec. 1.987-1(b)(6) is the same as the text of Sec. 1.987-1T(b)(6) published elsewhere in this issue of the Federal Register]. * * * * * (c) * * * (1) * * * (ii) * * * (B) [The text of the proposed amendment to Sec. 1.987- 1(c)(1)(ii)(B) is the same as the text of Sec. 1.987-1T(c)(1)(ii)(B) published elsewhere in this issue of the Federal Register] * * * * * (c) * * * (3) * * * (i) * * * (E) [The text of the proposed amendment to Sec. 1.987- 1(c)(3)(i)(E) is the same as the text of Sec. 1.987-1T(c)(3)(i)(E) published elsewhere in this issue of the Federal Register]. * * * * * (d) * * * (3) [The text of the proposed amendment to Sec. 1.987-1(d)(3) is the same as the text of Sec. 1.987-1T(d)(3) published elsewhere in this issue of the Federal Register]. * * * * * (f) [The text of the proposed amendment to Sec. 1.987-1(f) is the same as the text of Sec. 1.987-1T(f) published elsewhere in this issue of the Federal Register]. * * * * * (g) * * * (2) * * * (i) * * * (B) [The text of the proposed amendment to Sec. 1.987- 1(g)(2)(i)(B) is the same as the text of Sec. 1.987-1T(g)(2)(i)(B) published elsewhere in this issue of the Federal Register]. (C) [The text of the proposed amendment to Sec. 1.987- 1(g)(2)(i)(C) is the same as the text of Sec. 1.987-1T(g)(2)(i)(C) published elsewhere in this issue of the Federal Register]. * * * * * (3) * * * (i) * * * (E) [The text of the proposed amendment to Sec. 1.987- 1(g)(3)(i)(E) is the same as the text of Sec. 1.987-1T(g)(3)(i)(E) published elsewhere in this issue of the Federal Register]. (F) [The text of the proposed amendment to Sec. 1.987- 1(g)(3)(i)(F) is the same as the text of Sec. 1.987-1T(g)(3)(i)(F) published elsewhere in this issue of the Federal Register]. (G) [The text of the proposed amendment to Sec. 1.987- 1(g)(3)(i)(G) is the same as the text of Sec. 1.987-1T(g)(3)(i)(G) published elsewhere in this issue of the Federal Register]. (H) [The text of the proposed amendment to Sec. 1.987- 1(g)(3)(i)(H) is the same as the text of Sec. 1.987-1T(g)(3)(i)(H) published elsewhere in this issue of the Federal Register]. * * * * * 0 Par. 3. Section 1.987-2 is amended by adding paragraph (c)(9) to read as follows: Sec. 1.987-2 Attribution of items to eligible QBUs; definition of a transfer and related rules. * * * * * (c) * * * (9) [The text of the proposed amendment to Sec. 1.987-2(c)(9) is the same as the text of Sec. 1.987-2T(c)(9) published elsewhere in this issue of the Federal Register]. * * * * * 0 Par. 4. Section 1.987-3 is amended by adding paragraphs (b)(2)(ii), (b)(4), (c)(2)(ii) and (v), (d), and Example 9 through Example 14 of paragraph (e) to read as follows: [[Page 88884]] Sec. 1.987-3 Determination of section 987 taxable income or loss of an owner of a section 987 QBU. * * * * * (b) * * * (2) * * * (ii) [The text of the proposed amendment to Sec. 1.987-3(b)(2)(ii) is the same as the text of Sec. 1.987-3T(b)(2)(ii) published elsewhere in this issue of the Federal Register]. * * * * * (4) [The text of the proposed amendment to Sec. 1.987-3(b)(4) is the same as the text of Sec. 1.987-3T(b)(4) published elsewhere in this issue of the Federal Register]. * * * * * (c) * * * (2) * * * (ii) [The text of the proposed amendment to Sec. 1.987-3(c)(2)(ii) is the same as the text of Sec. 1.987-3T(c)(2)(ii) published elsewhere in this issue of the Federal Register]. * * * * * (v) [The text of the proposed amendment to Sec. 1.987-3(c)(2)(v) is the same as the text of Sec. 1.987-3T(c)(2)(v) published elsewhere in this issue of the Federal Register]. (d) [The text of the proposed amendment to Sec. 1.987-3(d) is the same as the text of Sec. 1.987-3T(d) published elsewhere in this issue of the Federal Register]. (e) Examples. * * * Example 9 The text of the proposed amendment to Sec. 1.987-3(e) Example 9 is the same as the text of Sec. 1.987-3T(e) Example 9 published elsewhere in this issue of the Federal Register]. Example 10 [The text of the proposed amendment to Sec. 1.987- 3(e) Example 10 is the same as the text of Sec. 1.987-3T(e) Example 10 published elsewhere in this issue of the Federal Register]. Example 11 [The text of the proposed amendment to Sec. 1.987- 3(e) Example 11 is the same as the text of Sec. 1.987-3T(e) Example 11 published elsewhere in this issue of the Federal Register]. Example 12 [The text of the proposed amendment to Sec. 1.987- 3(e) Example 12 is the same as the text of Sec. 1.987-3T(e) Example 12 published elsewhere in this issue of the Federal Register]. Example 13 [The text of the proposed amendment to Sec. 1.987- 3(e) Example 13 is the same as the text of Sec. 1.987-3T(e) Example 13 published elsewhere in this issue of the Federal Register]. Example 14 [The text of the proposed amendment to Sec. 1.987- 3(e) Example 14 is the same as the text of Sec. 1.987-3T(e) Example 14 published elsewhere in this issue of the Federal Register]. 0 Par. 5. Section 1.987-4 is amended by adding paragraphs (c)(2) and (f) to read as follows: Sec. 1.987-4 Determination of net unrecognized section 987 gain or loss of a section 987 QBU. * * * * * (c) * * * (2) [The text of the proposed amendment to Sec. 1.987-4(c)(2) is the same as the text of Sec. 1.987-4T(c)(2) published elsewhere in this issue of the Federal Register]. * * * * * (f) [The text of the proposed amendment to Sec. 1.987-4(f) is the same as the text of Sec. 1.987-4T(f) published elsewhere in this issue of the Federal Register]. * * * * * 0 Par. 6. Section 1.987-6 is amended by adding paragraph (b)(4) to read as follows: Sec. 1.987-6 Character and source of section 987 gain or loss. * * * * * (b) * * * (4) [The text of the proposed amendment to Sec. 1.987-6(b)(4) is the same as the text of Sec. 1.987-6T(b)(4) published elsewhere in this issue of the Federal Register]. * * * * * 0 Par. 7. Section 1.987-7 is amended by adding paragraph (b) to read as follows: Sec. 1.987-7 Section 987 aggregate partnerships. * * * * * (b) [The text of the proposed amendment to Sec. 1.987-7(b) is the same as the text of Sec. 1.987-7T(b) published elsewhere in this issue of the Federal Register]. * * * * * 0 Par. 8. Section 1.987-8 is amended by adding paragraph (d) to read as follows: Sec. 1.987-8 Termination of a section 987 QBU. * * * * * (d) [The text of the proposed amendment to Sec. 1.987-8(d) is the same as the text of Sec. 1.987-8T(d) published elsewhere in this issue of the Federal Register]. * * * * * 0 Par. 9. Section 1.987-12 is revised to read as follows: Sec. 1.987-12 Deferral of section 987 gain or loss. [The text of the proposed amendment to Sec. 1.987-12 is the same as the text of Sec. 1.987-12T published elsewhere in this issue of the Federal Register]. 0 Par. 10. Section 1.988-1 is amended by adding paragraph (a)(3) to read as follows: Sec. 1.988-1 Certain definitions and special rules. * * * * * (a) * * * (3) [The text of the proposed amendment to Sec. 1.988-1(a)(3) is the same as the text of Sec. 1.988-1T(a)(3) published elsewhere in this issue of the Federal Register]. * * * * * 0 Par. 11. Section 1.988-2 is amended by revising paragraph (b)(16) and adding paragraph (i) to read as follows: Sec. 1.988-2 Recognition and computation of exchange gain or loss. * * * * * (b) * * * (16) [The text of the proposed amendment to Sec. 1.988-2(b)(16) is the same as the text of Sec. 1.988-2T(b)(16) published elsewhere in this issue of the Federal Register]. * * * * * (i) [The text of the proposed amendment to Sec. 1.988-2(i) is the same as the text of Sec. 1.988-2T(i) published elsewhere in this issue of the Federal Register]. John Dalrymple, Deputy Commissioner for Services and Enforcement. [FR Doc. 2016-28377 Filed 12-7-16; 8:45 am] BILLING CODE 4830-01-P
![88882 Federal Register / Vol. 81, No. 236 / Thursday, December 8, 2016 / Proposed Rules
DEPARTMENT OF THE TREASURY Washington, DC, or sent electronically 1(g)(3)(i)(F) allow a taxpayer to elect to
via the Federal eRulemaking Portal at apply a foreign currency mark-to-market
Internal Revenue Service http://www.regulations.gov (IRS REG– method of accounting for qualified
128276–12). short-term section 988 transactions.
26 CFR Part 1 FOR FURTHER INFORMATION CONTACT: Sections 1.987–3(d) and 1.987–
[REG–128276–12] Concerning the proposed regulations, 1(g)(3)(i)(G) allow a taxpayer to elect to
Steven D. Jensen at (202) 317–6938; translate all items of income, gain,
RIN 1545–BL11 deduction, and loss of the section 987
concerning submissions of comments or
requests for a public hearing, Regina QBU at the yearly average exchange
Recognition and Deferral of Section
Johnson, (202) 317–6901 (not toll-free rate. Sections 1.987–8(d) and 1.987–
987 Gain or Loss
numbers). 1(g)(3)(i)(H) allow a taxpayer to elect to
AGENCY: Internal Revenue Service (IRS), deem all of its section 987 QBUs to
SUPPLEMENTARY INFORMATION:
Treasury. terminate on the last day of each taxable
ACTION: Notice of proposed rulemaking Paperwork Reduction Act year. The preceding elections are to be
by cross-reference to temporary The collection of information made pursuant to § 1.987–1(g). The
regulations. contained in this notice of proposed collection of information is voluntary to
rulemaking has been submitted to the obtain a benefit. The likely respondents
SUMMARY: Published elsewhere in this are business or other for-profit
issue of the Federal Register, the Office of Management and Budget for
review in accordance with the institutions.
Treasury Department and the IRS are Estimated total annual reporting
issuing temporary regulations under Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)). Comments on the burden: 1,000 hours.
section 987 of the Code relating to the Estimated average annual burden
recognition and deferral of foreign collection of information should be sent
to the Office of Management and hours per respondent: 1 hour.
currency gain or loss under section 987 Estimated number of respondents:
with respect to a qualified business unit Budget, Attn: Desk Officer for the
Department of the Treasury, Office of 1,000.
(QBU) in connection with certain QBU Estimated annual frequency of
terminations and certain other Information and Regulatory Affairs,
Washington, DC 20503, with copies to responses: On occasion.
transactions involving partnerships. The
the Internal Revenue Service, Attn: IRS An agency may not conduct or
temporary regulations also contain rules
Reports Clearance Officer, sponsor, and a person is not required to
providing: An annual deemed
SE:CAR:MP:T:T:SP, Washington, DC respond to, a collection of information
termination election for a section 987
20224. Comments on the collection of unless it displays a valid control
QBU; an elective method, available to
information should be received by number assigned by the Office of
taxpayers that make the annual deemed
February 6, 2017. Comments are Management and Budget.
termination election, for translating all
specifically requested concerning: Books or records relating to a
items of income or loss with respect to
Whether the proposed collection of collection of information must be
a section 987 QBU at the yearly average
information is necessary for the proper retained as long as their contents may
exchange rate; rules regarding the
performance of the Internal Revenue become material in the administration
treatment of section 988 transactions of
Service, including whether the of any internal revenue law. Generally,
a section 987 QBU; rules regarding
information will have practical utility; tax returns and tax return information
QBUs with the U.S. dollar as their
The accuracy of the estimated are confidential, as required by 26
functional currency; rules regarding
burden associated with the proposed U.S.C. 6103.
combinations and separations of section
987 QBUs; rules regarding the collection of information (see below); Background and Explanation of
How the quality, utility, and clarity
translation of income used to pay Provisions
of the information to be collected may
creditable foreign income taxes; and The temporary regulations (published
be enhanced;
rules regarding the allocation of assets in the Rules and Regulations section of
How the burden of complying with
and liabilities of certain partnerships for this issue of the Federal Register)
the proposed collection of information
purposes of section 987. Finally, the contain rules relating to the recognition
may be minimized, including through
temporary regulations contain rules and deferral of section 987 gain or loss
the application of automated collection
under section 988 requiring the deferral with respect to a QBU. The temporary
techniques or other forms of information
of certain section 988 loss that arises regulations also contain rules regarding
technology; and
with respect to related-party loans. The an annual deemed termination election,
Estimates of capital or start-up costs
text of the temporary regulations serves an elective method for translating
and costs of operation, maintenance,
as the text of these proposed taxable income or loss with respect to a
and purchase of service to provide
regulations. QBU, section 988 transactions of a
information.
DATES: Written or electronic comments The collection of information in section 987 QBU, QBUs with the U.S.
and requests for a public hearing must this proposed regulation is in: (1) dollar as their functional currency,
be received by March 8, 2017. §§ 1.987–1(b)(6)(iii)(A) and 1.987– combinations and separations of section
ADDRESSES: Send submissions to: 1(g)(3)(i)(E); (2) §§ 1.987–3(b)(4)(iii)(C) 987 QBUs, translation of income used to
sradovich on DSK3GMQ082PROD with PROPOSALS2
CC:PA:LPD:PR (REG–128276–12), Room and 1.987–1(g)(3)(i)(F); (3) §§ 1.987–3(d) pay creditable foreign income taxes, the
5203, Internal Revenue Service, P.O. and 1.987–1(g)(3)(i)(G); and (4) allocation of assets and liabilities of
Box 7604, Ben Franklin Station, §§ 1.987–8(d) and 1.987–1(g)(3)(i)(H). certain partnerships for purposes of
Washington, DC 20044. Submissions Sections 1.987–1(b)(6)(iii)(A) and 1.987– section 987, and the deferral of section
may be hand-delivered Monday through 1(g)(3)(i)(E) allow a controlled foreign 988 loss with respect to certain related-
Friday between the hours of 8 a.m. and corporation to elect to apply section 987 party loans. The text of the temporary
4 p.m. to CC:PA:LPD:PR (REG–128276– and the regulations thereunder (with regulations also serves as the text of
12), Courier’s Desk, Internal Revenue certain exceptions) to a dollar QBU. these proposed regulations. The
Service, 1111 Constitution Avenue NW., Sections 1.987–3(b)(4)(iii)(C) and 1.987– preamble to the temporary regulations
VerDate Sep<11>2014 18:18 Dec 07, 2016 Jkt 241001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 E:\FR\FM\08DEP2.SGM 08DEP2](https://thefederalregister.org/doc/81_FR_89118/page/1.svg)
![Federal Register / Vol. 81, No. 236 / Thursday, December 8, 2016 / Proposed Rules 88883
explains those regulations and these Office of Associate Chief Counsel same as the text of § 1.987–1T(d)(3)
proposed regulations. (International). However, other published elsewhere in this issue of the
personnel from the IRS and the Treasury Federal Register].
Special Analyses
Department participated in their * * * * *
Certain IRS regulations, including development. (f) [The text of the proposed
these, are exempt from the requirements
List of Subjects amendment to § 1.987–1(f) is the same
of Executive Order 12866, as
as the text of § 1.987–1T(f) published
supplemented and reaffirmed by Income taxes, Reporting and elsewhere in this issue of the Federal
Executive Order 13563. Therefore, a recordkeeping requirements. Register].
regulatory impact assessment is not
required. It is hereby certified that these Proposed Amendments to the * * * * *
regulations will not have a significant Regulations (g) * * *
economic impact on a substantial Accordingly, 26 CFR part 1, as (2) * * *
number of small entities within the amended elsewhere in this issue of the (i) * * *
meaning of section 601(6) of the Federal Register, is proposed to be (B) [The text of the proposed
Regulatory Flexibility Act (5 U.S.C. further amended as follows: amendment to § 1.987–1(g)(2)(i)(B) is
chapter 6). Accordingly, a regulatory the same as the text of § 1.987–
flexibility analysis is not required. This PART 1—INCOME TAXES 1T(g)(2)(i)(B) published elsewhere in
certification is based on the fact that this issue of the Federal Register].
these regulations will primarily affect ■ Paragraph 1. The authority citation (C) [The text of the proposed
U.S. corporations that have foreign for part 1 continues to read in part as amendment to § 1.987–1(g)(2)(i)(C) is
operations, which tend to be larger follows: the same as the text of § 1.987–
businesses. Pursuant to section 7805(f) Authority: 26 U.S.C. 985, 987, 989(c) and 1T(g)(2)(i)(C) published elsewhere in
of the Code, these regulations have been 7805 * * * this issue of the Federal Register].
submitted to the Chief Counsel for ■ Par. 2. Section 1.987–1 is amended by * * * * *
Advocacy of the Small Business adding paragraphs (b)(1)(iii), (b)(6), (3) * * *
Administration for comment on their (c)(1)(ii)(B), (c)(3)(i)(E), (d)(3), (f), (i) * * *
impact on small business. (g)(2)(i)(B) and (C), and (g)(3)(i)(E) (E) [The text of the proposed
Comments and Public Hearing through (H) to read as follows: amendment to § 1.987–1(g)(3)(i)(E) is the
Before these proposed regulations are same as the text of § 1.987–1T(g)(3)(i)(E)
§ 1.987–1 Scope, definitions, and special
adopted as final regulations, published elsewhere in this issue of the
rules.
consideration will be given to any Federal Register].
* * * * * (F) [The text of the proposed
comments that are submitted timely to (b) * * *
the IRS as prescribed in this preamble amendment to § 1.987–1(g)(3)(i)(F) is the
(1) * * * same as the text of § 1.987–1T(g)(3)(i)(F)
under the ADDRESSES heading. The (iii) [The text of the proposed
Treasury Department and the IRS published elsewhere in this issue of the
amendment to § 1.987–1(b)(1)(iii) is the Federal Register].
request comments on all aspects of the same as the text of § 1.987–1T(b)(1)(iii)
proposed rules. In addition, the (G) [The text of the proposed
published elsewhere in this issue of the
Treasury Department and the IRS amendment to § 1.987–1(g)(3)(i)(G) is
Federal Register].
request comments on the application of the same as the text of § 1.987–
* * * * * 1T(g)(3)(i)(G) published elsewhere in
section 987 to entities and QBUs (6) [The text of the proposed
described in § 1.987–1(b)(1)(ii) to which this issue of the Federal Register].
amendment to § 1.987–1(b)(6) is the (H) [The text of the proposed
the final regulations are not applicable same as the text of § 1.987–1T(b)(6)
(excluded entities and QBUs). amendment to § 1.987–1(g)(3)(i)(H) is
published elsewhere in this issue of the the same as the text of § 1.987–
Comments are requested on whether the Federal Register].
Treasury Department and the IRS 1T(g)(3)(i)(H) published elsewhere in
* * * * * this issue of the Federal Register].
should issue regulations applying the
(c) * * * * * * * *
foreign exchange exposure pool
(1) * * * ■ Par. 3. Section 1.987–2 is amended by
methodology described in §§ 1.987–3
(ii) * * * adding paragraph (c)(9) to read as
and –4 to excluded entities and QBUs.
(B) [The text of the proposed
Comments are also requested on the follows:
amendment to § 1.987–1(c)(1)(ii)(B) is
modifications, if any, that should be
the same as the text of § 1.987– § 1.987–2 Attribution of items to eligible
made to the foreign exchange exposure
1T(c)(1)(ii)(B) published elsewhere in QBUs; definition of a transfer and related
pool methodology adopted in the final rules.
this issue of the Federal Register]
regulations with respect to excluded
* * * * * * * * * *
entities and QBUs. All comments will
(c) * * * (c) * * *
be available at www.regulations.gov or
upon request. A public hearing will be (3) * * * (9) [The text of the proposed
scheduled if requested in writing by any (i) * * * amendment to § 1.987–2(c)(9) is the
(E) [The text of the proposed same as the text of § 1.987–2T(c)(9)
sradovich on DSK3GMQ082PROD with PROPOSALS2
person that timely submits written
comments. If a public hearing is amendment to § 1.987–1(c)(3)(i)(E) is the published elsewhere in this issue of the
scheduled, notice of the date, time, and same as the text of § 1.987–1T(c)(3)(i)(E) Federal Register].
place for the hearing will be published published elsewhere in this issue of the * * * * *
in the Federal Register. Federal Register]. ■ Par. 4. Section 1.987–3 is amended by
* * * * * adding paragraphs (b)(2)(ii), (b)(4),
Drafting Information (d) * * * (c)(2)(ii) and (v), (d), and Example 9
The principal author of these (3) [The text of the proposed through Example 14 of paragraph (e) to
regulations is Mark E. Erwin of the amendment to § 1.987–1(d)(3) is the read as follows:
VerDate Sep<11>2014 18:18 Dec 07, 2016 Jkt 241001 PO 00000 Frm 00003 Fmt 4701 Sfmt 4702 E:\FR\FM\08DEP2.SGM 08DEP2](https://thefederalregister.org/doc/81_FR_89118/page/2.svg)
![88884 Federal Register / Vol. 81, No. 236 / Thursday, December 8, 2016 / Proposed Rules
§ 1.987–3 Determination of section 987 same as the text of § 1.987–3T(e) Example 13 § 1.987–8 Termination of a section 987
taxable income or loss of an owner of a published elsewhere in this issue of the QBU.
section 987 QBU. Federal Register]. * * * * *
* * * * * Example 14 [The text of the proposed
amendment to § 1.987–3(e) Example 14 is the (d) [The text of the proposed
(b) * * * same as the text of § 1.987–3T(e) Example 14 amendment to § 1.987–8(d) is the same
(2) * * * published elsewhere in this issue of the as the text of § 1.987–8T(d) published
(ii) [The text of the proposed Federal Register]. elsewhere in this issue of the Federal
amendment to § 1.987–3(b)(2)(ii) is the Register].
same as the text of § 1.987–3T(b)(2)(ii) ■ Par. 5. Section 1.987–4 is amended by
adding paragraphs (c)(2) and (f) to read * * * * *
published elsewhere in this issue of the
Federal Register]. as follows: ■ Par. 9. Section 1.987–12 is revised to
read as follows:
* * * * * § 1.987–4 Determination of net
(4) [The text of the proposed unrecognized section 987 gain or loss of a § 1.987–12 Deferral of section 987 gain or
amendment to § 1.987–3(b)(4) is the section 987 QBU. loss.
same as the text of § 1.987–3T(b)(4) * * * * * [The text of the proposed amendment
published elsewhere in this issue of the (c) * * * to § 1.987–12 is the same as the text of
Federal Register]. (2) [The text of the proposed § 1.987–12T published elsewhere in this
* * * * * amendment to § 1.987–4(c)(2) is the issue of the Federal Register].
(c) * * * same as the text of § 1.987–4T(c)(2)
■ Par. 10. Section 1.988–1 is amended
(2) * * * published elsewhere in this issue of the
by adding paragraph (a)(3) to read as
(ii) [The text of the proposed Federal Register].
follows:
amendment to § 1.987–3(c)(2)(ii) is the * * * * *
same as the text of § 1.987–3T(c)(2)(ii) (f) [The text of the proposed § 1.988–1 Certain definitions and special
published elsewhere in this issue of the amendment to § 1.987–4(f) is the same rules.
Federal Register]. as the text of § 1.987–4T(f) published * * * * *
* * * * * elsewhere in this issue of the Federal (a) * * *
(v) [The text of the proposed Register]. (3) [The text of the proposed
amendment to § 1.987–3(c)(2)(v) is the * * * * * amendment to § 1.988–1(a)(3) is the
same as the text of § 1.987–3T(c)(2)(v) ■ Par. 6. Section 1.987–6 is amended by same as the text of § 1.988–1T(a)(3)
published elsewhere in this issue of the adding paragraph (b)(4) to read as published elsewhere in this issue of the
Federal Register]. follows: Federal Register].
(d) [The text of the proposed * * * * *
§ 1.987–6 Character and source of section
amendment to § 1.987–3(d) is the same 987 gain or loss. ■ Par. 11. Section 1.988–2 is amended
as the text of § 1.987–3T(d) published by revising paragraph (b)(16) and adding
* * * * *
elsewhere in this issue of the Federal paragraph (i) to read as follows:
(b) * * *
Register]. (4) [The text of the proposed
(e) Examples. * * * amendment to § 1.987–6(b)(4) is the
§ 1.988–2 Recognition and computation of
exchange gain or loss.
Example 9 The text of the proposed same as the text of § 1.987–6T(b)(4)
amendment to § 1.987–3(e) Example 9 is the published elsewhere in this issue of the * * * * *
same as the text of § 1.987–3T(e) Example 9 Federal Register]. (b) * * *
published elsewhere in this issue of the (16) [The text of the proposed
Federal Register]. * * * * *
■ Par. 7. Section 1.987–7 is amended amendment to § 1.988–2(b)(16) is the
Example 10 [The text of the proposed
by adding paragraph (b) to read as same as the text of § 1.988–2T(b)(16)
amendment to § 1.987–3(e) Example 10 is the
same as the text of § 1.987–3T(e) Example 10 follows: published elsewhere in this issue of the
published elsewhere in this issue of the Federal Register].
Federal Register]. § 1.987–7 Section 987 aggregate * * * * *
Example 11 [The text of the proposed partnerships.
(i) [The text of the proposed
amendment to § 1.987–3(e) Example 11 is the * * * * * amendment to § 1.988–2(i) is the same
same as the text of § 1.987–3T(e) Example 11 (b) [The text of the proposed as the text of § 1.988–2T(i) published
published elsewhere in this issue of the amendment to § 1.987–7(b) is the same
Federal Register].
elsewhere in this issue of the Federal
as the text of § 1.987–7T(b) published Register].
Example 12 [The text of the proposed elsewhere in this issue of the Federal
amendment to § 1.987–3(e) Example 12 is the Register]. John Dalrymple,
same as the text of § 1.987–3T(e) Example 12
* * * * * Deputy Commissioner for Services and
published elsewhere in this issue of the
■ Par. 8. Section 1.987–8 is amended Enforcement.
Federal Register].
Example 13 [The text of the proposed by adding paragraph (d) to read as [FR Doc. 2016–28377 Filed 12–7–16; 8:45 am]
amendment to § 1.987–3(e) Example 13 is the follows: BILLING CODE 4830–01–P
sradovich on DSK3GMQ082PROD with PROPOSALS2
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Document Created: 2016-12-08 00:26:45
Document Modified: 2016-12-08 00:26:45
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Proposed Rules | |
| Action | Notice of proposed rulemaking by cross-reference to temporary regulations. | |
| Dates | Written or electronic comments and requests for a public hearing must be received by March 8, 2017. | |
| Contact | Concerning the proposed regulations, Steven D. Jensen at (202) 317-6938; concerning submissions of comments or requests for a public hearing, Regina Johnson, (202) 317-6901 (not toll-free numbers). | |
| FR Citation | 81 FR 88882 | |
| RIN Number | 1545-BL11 |
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