26 U.S.C. § 987
§ 987. Branch transactions
No plain-English explainer yet. Below is the official text. Explainers are being added section by section.
History
Added in 1986 by the Tax Reform Act of 1986. Last changed November 10, 1988 by the Technical and Miscellaneous Revenue Act of 1988.
Every change, newest first (2)
- November 10, 1988Technical and Miscellaneous Revenue Act of 1988
- October 22, 1986Tax Reform Act of 1986 · added this section
The law as written
Current through Public Law 119-102. Amendment notes omitted.
In the case of any taxpayer having 1 or more qualified business units with a functional currency other than the dollar, taxable income of such taxpayer shall be determined—
by computing the taxable income or loss separately for each such unit in its functional currency,
by translating the income or loss separately computed under paragraph (1) at the appropriate exchange rate, and
by making proper adjustments (as prescribed by the Secretary) for transfers of property between qualified business units of the taxpayer having different functional currencies, including—
treating post-1986 remittances from each such unit as made on a pro rata basis out of post-1986 accumulated earnings, and
treating gain or loss determined under this paragraph as ordinary income or loss, respectively, and sourcing such gain or loss by reference to the source of the income giving rise to post-1986 accumulated earnings.