IRS Notice: Modifications to Rules for Computing Taxable Income, Foreign Currency Gain (IRC §987)

The IRS published a notice announcing proposed regulations under I.R.C. §987 to modify the rules for calculating taxable income and foreign currency gain or loss. The proposed regulations would permit taxpayers with qualified business units (QBUs) that use different functional currencies to determine taxable income or loss and foreign currency gain or loss by maintaining equity and basis pools. The notice also describes measures to narrow the scope of the loss suspension rules, simplify the loss-to-the-extent-of-gain rules, clarify the definition of successor for deferral purposes, and expand the definition of hedging transactions under §987. Additionally, the notice outlines a proposed ...