New Section 987 QBU Regs and Outbound Transfers: New Rules Limiting Recognition of Built-In Foreign Currency Losses
Outbound Loss Events, Changes to QBU Termination Treatment, Basis Adjustments on QBUs Transferred to Foreign Affiliates
A live 110-minute CPE webinar with interactive Q&A
This webinar will provide corporate tax advisers with a practical guide to the recently issued Section 987 regulations limiting loss recognition opportunities for outbound transfers involving foreign currency losses to foreign qualified business units (QBUs). The panel will detail how the new final regulations require gain recognition but loss deferral on certain QBU termination events, and outline strategies for avoiding recharacterization of QBU losses.
- Definitions and applications of IRC 987
- Identifying IRC 989 qualified business units
- Statutory framework of 987
- Functional currency loss calculation
- Prior restructuring opportunities involving recognition of 987 gains and losses in the year of transfer
- Final regulations issued May 2019 in TD 9857
- Changes to transfer rules in Treas. Reg. 1.987-2
- Treas. Reg. 1.987-12(d)(2) new rules specifying deferral events
- Outbound loss event recognition deferral requirement
- Thresholds requiring deferral on foreign currency 987 losses
- Basis adjustment requirement for unrecognized loss in QBU transfer
- Restructuring strategies involving QBU transfers under the new guidance
The panel will discuss these and other essential questions:
- How does the new guidance impact restructuring opportunities for U.S. corporations with unrecognized 987 foreign currency losses?
- What constitutes an "outbound loss event" requiring deferral?
- Basis adjustments required in an outbound transfer of a QBU with unrecognized Section 987 loss
Doris S. Hsu
The Hsu Law Firm
Ms. Hsu has counseled clients for almost 20 years on the appropriate structures for their businesses and personal... | Read More
Ms. Hsu has counseled clients for almost 20 years on the appropriate structures for their businesses and personal investments. Because of her background in both the income tax and the trust/estate areas, Ms. Hsu is uniquely qualified in delivering comprehensive advice to her clients. As a result of her international background, Ms. Hsu is especially appreciative of the cultural considerations of her international clients in her tax advice.Close
William R. Skinner
Fenwick & West
Mr. Skinner focuses his practice on U.S. international taxation, with a particular emphasis on tax planning and... | Read More
Mr. Skinner focuses his practice on U.S. international taxation, with a particular emphasis on tax planning and international corporate transactions. He has broad experience in international tax issues for U.S. corporations, foreign corporations, and high net-worth individuals, and has represented clients across a variety of industries. He teaches international taxation as an adjunct professor in San Jose State University’s MST program, and speaks and writes frequently on international and corporate tax issues.Close
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