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Internal Revenue Bulletin:  2017-2 

January 9, 2017 

INCOME TAX


REG–128276–12REG–128276–12

The temporary and proposed regulations contain rules relating to the recognition and deferral of foreign currency gain or loss under section 987 with respect to a QBU in connection with certain QBU terminations and certain other transactions involving partnerships. The temporary and proposed regulations also provide for (i) an annual deemed termination election for a section 987 QBU; (ii) 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; (iii) rules regarding the treatment of section 988 transactions of a section 987 QBU; (iv) rules regarding QBUs with the U.S. dollar as their functional currency; (v) rules regarding combinations and separations of section 987 QBUs; (vi) rules regarding the translation of income used to pay creditable foreign income taxes; (vii) rules regarding the allocation of assets and liabilities of certain partnerships for purposes of section 987; and (viii) rules under section 988 requiring the deferral of certain section 988 loss that arises with respect to related-party loans.

Rev. Rul. 2017–02Rev. Rul. 2017–02

Federal rates; adjusted federal rates; adjusted federal long-term rate and the long-term exempt rate. For purposes of sections 382, 642, 1274, 1288, 7872, and other sections of the Code, tables set forth the rates for January 2017.

Notice 2017–03Notice 2017–03

This notice provides the maximum vehicle values for use with the special valuation rules under regulation section 1.61–21(d) and (e) for 2017. These values are adjusted for inflation and must be adjusted annually by reference to the Consumer Price Index.

T.D. 9794T.D. 9794

The final regulations provide guidance under section 987 regarding the determination of the taxable income or loss of a taxpayer with respect to a qualified business unit (QBU) subject to section 987, as well as the timing, amount, character, and source of any section 987 gain or loss.

T.D. 9795T.D. 9795

The temporary and proposed regulations contain rules relating to the recognition and deferral of foreign currency gain or loss under section 987 with respect to a QBU in connection with certain QBU terminations and certain other transactions involving partnerships. The temporary and proposed regulations also provide for 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; rules regarding the allocation of assets and liabilities of certain partnerships for purposes of section 987; and rules under section 988 requiring the deferral of certain section 988 loss that arises with respect to related-party loans.

TD 9801T.D. 9801

The final regulations provide a revised definition of issue price for purposes of the arbitrage restrictions under section 148 that apply to tax-exempt bonds under section 103, tax credit bonds under section 54A, and direct pay bonds under section 6431.


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