Internal Revenue Bulletin: 2006-42
October 16, 2006
Table of Contents
- FOR FURTHER INFORMATION CONTACT:
- SUPPLEMENTARY INFORMATION:
- Paperwork Reduction Act
- A. Overview.
- B. The Statute.
- C. The Legislative History.
- 1. Prior law.
- 2. Relationship between section 986(c) and 987.
- D. The 1991 Proposed Regulations.
- E. Concerns Regarding the 1991 Proposed Regulations; Notice 2000-20.
- F. The Foreign Exchange Exposure Pool Method.
- Explanation of Provisions
- A. Section 1.987-1 Scope, Definitions and Special Rules.
- 1. Scope in general.
- 2. Taxpayers subject to section 987 and related definitions.
- 3. De minimis rule for certain indirectly owned section 987 QBUs.
- 4. Exchange rates.
- 5. Definitions of a section 987 marked item and a section 987 historic item.
- 6. Elections under section 987.
- B. Section 1.987-2 Attribution of Items to an Eligible QBU; the Definition of a Transfer, and Related Rules.
- 1. Attribution of items to an eligible QBU.
- i. Overview.
- ii. Books and records method — general rule.
- iii. Exception for non-portfolio stock, interests in partnerships and certain acquisition indebtedness.
- iv. Coordination with source rules under section 988.
- 2. Certain assets and liabilities of partnerships and DEs not attributable to an eligible QBU.
- 3. Definition of a transfer.
- i. Overview.
- ii. Disregarded transactions.
- iii. Certain contributions to, and distributions from, partnerships.
- iv. Certain acquisitions and dispositions of interests in DEs and partnerships.
- v. Change in form of ownership.
- vi. General tax law principles.
- 4. Adjustments to items reflected on the books and records.
- 5. Translation of items transferred to a section 987 QBU.
- 6. Interaction with other foreign currency provisions.
- C. Section 1.987-3 Determination of the items of section 987 taxable income or loss of an owner of a section 987 QBU.
- D. Section 1.987-4 Determination of net unrecognized section 987 gain or loss of a section 987 QBU.
- E. Section 1.987-5 Recognition of Section 987 Gain or Loss.
- F. Section 1.987-6 Character and Source.
- G. Section 1.987-7 Partnership Rules.
- 1. Scope.
- 2. Allocation of assets and liabilities.
- 3. Coordination with subchapter K.
- 4. Comments.
- H. Section 1.987-8 Termination of a Section 987 QBU.
- 1. General termination rules.
- 2. Exceptions for certain section 381 transactions.
- 3. Treatment of inbound liquidations and inbound asset reorganizations.
- 4. Section 351 exchanges and transactions within a consolidated group.
- I. Section 1.987-9 Recordkeeping Rules.
- J. Section 1.987-10 Transition Rules.
- Proposed Effective Date
- Special Analyses
- Comments and Public Hearing
- Withdrawal of Notice of Proposed Rulemaking
- Proposed Amendment to the Regulations
- Drafting Information
- Announcement 2006-73
- Announcement 2006-74
- Announcement 2006-75
- Announcement 2006-76
- Announcement 2006-77
- Announcement 2006-78
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