New IRC 987 Regs and Foreign Currency Translation: Income Calculation for Qualified Business Units
Recording of a 110-minute CPE webinar with Q&A
This course will furnish corporate tax managers and advisers with a comprehensive guide to the recently issued IRC 987 regulations for calculating and reporting taxable income and loss attributable to a foreign branch with a different functional currency than its owner. The panel will describe the new methodology for calculating and reporting unrealized §987 gains, detail elections corporations may make in translating foreign currency income, discuss filing and reporting obligations, and outline changes due to the new regulations.
- Definitions and applications of IRC 987
- Identifying IRC 989 qualified business units
- Statutory framework of §987
- 2006 proposed guidance
- Prior framework for booking §987 gains and losses
- Final and temporary regulations
- “Fresh start” transition
- Limitation on recognizing loss when terminating existing QBUs
- Change in COGS calculation
- What happens to §987 losses on date of transition
- Sourcing and characterization of §987 losses under new regulations
- Financial accounting changes required by new regulations
- Impact of Notice 2017-57 and Executive Order 13789
- Planning and implementation of transition
The panel will discuss these and other important questions:
- What will §987 regulations require companies to do with existing deferred tax assets and liabilities on the date of the transition?
- How will a U.S. corporation have to change its GAAP financial statements under the new requirements?
- What planning opportunities are available to U.S. corporations with carry forward §987 losses?
- How do the new regulations affect corporations holding partnerships as QBUs?
Douglas E. Chestnut
Ernst & Young
Mr. Chestnut is a partner in the Firm’s International Tax Services Capital Markets group and works on various... | Read More
Mr. Chestnut is a partner in the Firm’s International Tax Services Capital Markets group and works on various international planning matters in the capital markets arena. He provides services related to foreign currency taxation, taxation of commodity trading, cross-border financing and other treasury planning, including currency risk management and hedging. He is also the primary author of the FAS 133 section of a BNA Tax Management Portfolio, which addresses FAS 109 for multinational corporations.Close