82_FR_61446 82 FR 61199 - Exclusion of Foreign Currency Gain or Loss Related to Business Needs From Foreign Personal Holding Company Income; Mark-to-Market Method of Accounting for Section 988 Transactions; Correction

82 FR 61199 - Exclusion of Foreign Currency Gain or Loss Related to Business Needs From Foreign Personal Holding Company Income; Mark-to-Market Method of Accounting for Section 988 Transactions; Correction

DEPARTMENT OF THE TREASURY
Internal Revenue Service

Federal Register Volume 82, Issue 247 (December 27, 2017)

Page Range61199-61199
FR Document2017-27865

This document contains corrections to the proposed regulations (REG-119514-15) that were published in the Federal Register on Tuesday, December 19, 2017. The proposed regulations provide guidance on the treatment of foreign currency gain or loss of a controlled foreign corporation (CFC) under the business needs exclusion from foreign personal holding company income (FPHCI). The proposed regulations also provide an election for a taxpayer to use a mark-to-market method of accounting for foreign currency gain or loss attributable to section 988 transactions. In addition, the proposed regulations permit the controlling United States shareholders of a CFC to automatically revoke certain elections concerning the treatment of foreign currency gain or loss.

Federal Register, Volume 82 Issue 247 (Wednesday, December 27, 2017) 
[Federal Register Volume 82, Number 247 (Wednesday, December 27, 2017)]
[Proposed Rules]
[Page 61199]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-27865]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[REG-119514-15]
RIN 1545-BM80


Exclusion of Foreign Currency Gain or Loss Related to Business 
Needs From Foreign Personal Holding Company Income; Mark-to-Market 
Method of Accounting for Section 988 Transactions; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking; correction.

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SUMMARY: This document contains corrections to the proposed regulations 
(REG-119514-15) that were published in the Federal Register on Tuesday, 
December 19, 2017. The proposed regulations provide guidance on the 
treatment of foreign currency gain or loss of a controlled foreign 
corporation (CFC) under the business needs exclusion from foreign 
personal holding company income (FPHCI). The proposed regulations also 
provide an election for a taxpayer to use a mark-to-market method of 
accounting for foreign currency gain or loss attributable to section 
988 transactions. In addition, the proposed regulations permit the 
controlling United States shareholders of a CFC to automatically revoke 
certain elections concerning the treatment of foreign currency gain or 
loss.

DATES: Written or electronic comments and requests for a public 
hearing, for the notice of proposed rulemaking at 82 FR 60135, December 
19, 2017, are still being accepted and must be received by March 19, 
2018.

ADDRESSES: Send submissions to CC:PA:LPD:PR (REG-119514-15), 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-
119514-15), Courier's desk, Internal Revenue Service, 1111 Constitution 
Avenue NW, Washington, DC 20224, or sent electronically, via the 
Federal eRulemaking Portal at www.regulations.gov (IRS REG-119514-15).

FOR FURTHER INFORMATION CONTACT: Jeffery G. Mitchell, (202) 317-6934 
(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    The proposed regulations that are the subject of this correction 
are under sections 446, 954 and 988 of the Internal Revenue Code.

Need for Correction

    As published, the proposed regulations contain errors which may 
prove to be misleading and need to be clarified.

Correction of Publication

    Accordingly, the proposed regulations (REG-119514-15) that are the 
subject of FR Doc. 2017-27320 are corrected as follows:
    On page 60138, in the preamble, first column, the first full 
paragraph is corrected to read:
    ``Although the borrowing and lending in the same nonfunctional 
currency are economically offsetting, section 475 creates the potential 
for a mismatch of gains and losses for a treasury center CFC. If the 
treasury center CFC qualifies as a dealer under section 475, for 
example because it regularly purchases debt from related CFCs in the 
ordinary course of a trade or business, the treasury center CFC 
generally must use a mark-to-market method of accounting for its 
securities. See section 475 and Sec.  1.475(c)-1(a)(3)(i). However, 
Sec.  1.475(c)-2(a)(2) provides that a dealer's own issued debt 
liabilities are not securities for purposes of section 475. 
Consequently, a treasury center CFC that marks to market its assets but 
not its liabilities may recognize any offsetting foreign currency gains 
and losses in different taxable years. To avoid this mismatch, 
taxpayers have taken positions that match a treasury center CFC's 
foreign currency gains and losses under a variety of theories. No 
inference is intended in these proposed regulations as to whether these 
positions are permissible in the years prior to the application of 
these proposed regulations.''

Martin V. Franks,
Chief, Publications and Regulations Branch, Legal Processing Division, 
Associate Chief Counsel, Procedure and Administration.
[FR Doc. 2017-27865 Filed 12-26-17; 8:45 am]
 BILLING CODE 4830-01-P

Federal Register / Vol. 82, No. 247 / Wednesday, December 27, 2017 / Proposed Rules 61199 and Budget under 44 U.S.C. 3501 et seq. notice of proposed rulemaking at 82 FR center CFC’s foreign currency gains and and assigned OMB Control Number 60135, December 19, 2017, are still losses under a variety of theories. No 1076–0021. Response is required to being accepted and must be received by inference is intended in these proposed obtain a benefit. A Federal agency may March 19, 2018. regulations as to whether these not conduct or sponsor, and you are not ADDRESSES: Send submissions to positions are permissible in the years required to respond to, a collection of CC:PA:LPD:PR (REG–119514–15), Room prior to the application of these information unless the form or 5203, Internal Revenue Service, P.O. proposed regulations.’’ regulation requesting the information Box 7604, Ben Franklin Station, displays a currently valid OMB Control Washington, DC 20044. Submissions Martin V. Franks, Number. Send comments regarding this may be hand delivered Monday through Chief, Publications and Regulations Branch, collection of information, including Friday between the hours of 8 a.m. and Legal Processing Division, Associate Chief suggestions for reducing the burden, to 4 p.m. to CC:PA:LPD:PR (REG–119514– Counsel, Procedure and Administration. the Information Collection Clearance 15), Courier’s desk, Internal Revenue [FR Doc. 2017–27865 Filed 12–26–17; 8:45 am] Officer—Indian Affairs, 1849 C Street Service, 1111 Constitution Avenue NW, BILLING CODE 4830–01–P NW, Washington, DC 20240. Washington, DC 20224, or sent Dated: October 19, 2017. electronically, via the Federal John Tahsuda, eRulemaking Portal at Principal Deputy Assistant Secretary—Indian www.regulations.gov (IRS REG–119514– DEPARTMENT OF THE INTERIOR Affairs, Exercising the Authority of the 15). Assistant Secretary—Indian Affairs. FOR FURTHER INFORMATION CONTACT: National Park Service [FR Doc. 2017–27668 Filed 12–26–17; 8:45 am] Jeffery G. Mitchell, (202) 317–6934 (not BILLING CODE 4337–15–P a toll-free number). 36 CFR Part 7 SUPPLEMENTARY INFORMATION: [NPS–PWR–GOGA–24579; PPPWGOGAPO, Background PPMPSPD1Z.YM0000] DEPARTMENT OF THE TREASURY The proposed regulations that are the Internal Revenue Service subject of this correction are under Withdrawal of Proposed Rule for Dog sections 446, 954 and 988 of the Internal Management at the Golden Gate 26 CFR Part 1 Revenue Code. National Recreation Area, California [REG–119514–15] Need for Correction AGENCY: National Park Service, Interior. RIN 1545–BM80 As published, the proposed ACTION: Withdrawal of proposed rule. regulations contain errors which may Exclusion of Foreign Currency Gain or prove to be misleading and need to be SUMMARY: The National Park Service Loss Related to Business Needs From clarified. (NPS) no longer intends to prepare a Foreign Personal Holding Company Correction of Publication final rule or issue a Golden Gate Income; Mark-to-Market Method of Accordingly, the proposed regulations National Recreation Area dog Accounting for Section 988 (REG–119514–15) that are the subject of management plan. The NPS has Transactions; Correction FR Doc. 2017–27320 are corrected as terminated the rulemaking process. AGENCY: Internal Revenue Service (IRS), follows: DATES: The proposed rule is withdrawn Treasury. On page 60138, in the preamble, first as of December 27, 2017. ACTION: Notice of proposed rulemaking; column, the first full paragraph is correction. corrected to read: FOR FURTHER INFORMATION CONTACT: ‘‘Although the borrowing and lending Dana Polk, Public Affairs Office, Park SUMMARY: This document contains in the same nonfunctional currency are Headquarters, Fort Mason, Building 201, corrections to the proposed regulations economically offsetting, section 475 San Francisco, CA 94123; phone 415– (REG–119514–15) that were published creates the potential for a mismatch of 561–4728. in the Federal Register on Tuesday, gains and losses for a treasury center December 19, 2017. The proposed CFC. If the treasury center CFC qualifies SUPPLEMENTARY INFORMATION: Pursuant regulations provide guidance on the as a dealer under section 475, for to the National Environmental Policy treatment of foreign currency gain or example because it regularly purchases Act (NEPA) and the regulations loss of a controlled foreign corporation debt from related CFCs in the ordinary implementing NEPA (40 CFR parts (CFC) under the business needs course of a trade or business, the 1500–1508 and 43 CFR part 46), the exclusion from foreign personal holding treasury center CFC generally must use NPS published a proposed rule for dog company income (FPHCI). The a mark-to-market method of accounting management on February 24, 2016 (81 proposed regulations also provide an for its securities. See section 475 and FR 9139). The NPS has now cancelled election for a taxpayer to use a mark-to- § 1.475(c)–1(a)(3)(i). However, that planning process and terminated market method of accounting for foreign § 1.475(c)–2(a)(2) provides that a the associated NEPA and rulemaking currency gain or loss attributable to dealer’s own issued debt liabilities are processes. No final rule will be issued. daltland on DSKBBV9HB2PROD with PROPOSALS section 988 transactions. In addition, not securities for purposes of section Dated: December 19, 2017. the proposed regulations permit the 475. Consequently, a treasury center controlling United States shareholders Martha J. Lee, CFC that marks to market its assets but of a CFC to automatically revoke certain not its liabilities may recognize any Acting Regional Director, Pacific West Region. elections concerning the treatment of offsetting foreign currency gains and [FR Doc. 2017–27827 Filed 12–26–17; 8:45 am] foreign currency gain or loss. losses in different taxable years. To BILLING CODE 4312–52–P DATES: Written or electronic comments avoid this mismatch, taxpayers have and requests for a public hearing, for the taken positions that match a treasury VerDate Sep<11>2014 20:10 Dec 26, 2017 Jkt 244001 PO 00000 Frm 00008 Fmt 4702 Sfmt 9990 E:\FR\FM\27DEP1.SGM 27DEP1


Document Created: 2017-12-27 02:23:25
Document Modified: 2017-12-27 02:23:25
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionNotice of proposed rulemaking; correction.
DatesWritten or electronic comments and requests for a public hearing, for the notice of proposed rulemaking at 82 FR 60135, December 19, 2017, are still being accepted and must be received by March 19, 2018.
ContactJeffery G. Mitchell, (202) 317-6934 (not a toll-free number).
FR Citation82 FR 61199 
RIN Number1545-BM80
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