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Please join our panelists for an in-depth discussion of the recently released proposed IRC Section 987 regulations, which provide new guidance on determining income and currency gain or loss with respect to a qualified business unit (QBU) that uses a different functional currency than its tax owner. While the proposed regulations retain some of the framework from the 2016 and 2019 final regulations, numerous important changes have been made that will require significant analysis, data gathering and computations in advance of transitioning to the new rules.
The following topics will be discussed:
Important transition considerations, including a new transition rule, the difference between being on an “eligible” pre-transition method or not, and the detailed “Section 987 Transition Information” that must be provided for each IRC Section 987 QBU
Potential alternative approaches available under the proposed regulations, including the default foreign exchange exposure pool (FEEP) method, the Current Rate Election and the Annual Recognition Election
Provisions that apply prior to transition, including special rules with respect to IRC Section 987 QBU terminations
Characterization of IRC Section 987 gain or loss as subpart F income or global intangible low-taxed income (GILTI)
Panelists
Colleen Zeller, Partner, National Tax – International Tax and Transaction Services, Ernst & Young LLP
Tim Kerr, Partner, National Tax – International Tax and Transaction Services, Ernst & Young LLP
Ray Stahl, Principal, National Tax – International Tax and Transaction Services, Ernst & Young LLP
Moderator
Lee Holt, Partner, National Tax – International Tax and Transaction Services, Ernst & Young LLP
EY webcast managed and produced by Ernst & Young LLP’s Tax Technical Knowledge Services Group, Washington, DC: Lynn Fairfax