Skip to main content
Find a Lawyer

Code of Federal Regulations Title 26. Internal Revenue § 26.1.988–2T Recognition and computation of exchange gain or loss (temporary)

Current as of October 02, 2022 | Updated by FindLaw Staff

<Text of section added by 81 FR 88879, retroactively effective Dec. 7, 2016.>

(a) through (b)(15) [Reserved]. For further guidance, see § 1.988–2(a) through (b)(15).

(16) Deferral of loss on certain related-party debt instruments. —(i) Treatment of creditor. For rules applicable to a corporation included in a controlled group that is a creditor under a debt instrument see § 1.267(f)–1(e).

(ii) Treatment of debtor—(A) In general. Exchange loss realized under § 1.988–2(b)(4) or (b)(6) is deferred if—

(1) The loss is realized by a debtor with respect to a loan from a person that has a relationship to the debtor described in section 267(b) or section 707(b);  and

(2) The transaction resulting in the realization of exchange loss has as a principal purpose the avoidance of Federal income tax.

(B) Recognition of deferred loss. Any exchange loss that is deferred under paragraph (b)(16)(ii)(A) of this section is deferred until the end of the term of the loan, determined immediately prior to the transaction.

(17) through (h) [Reserved]. For further guidance, see § 1.988–2(b)(17) through (h).

(i) Special rules for section 988 transactions of a section 987 QBU. For rules regarding section 988 transactions of a section 987 QBU, see § 1.987–3T(b)(4) for section 987 QBUs in general and § 1.987–1T(b)(6) for dollar QBUs.

(j) Effective/applicability date. Paragraph (b)(16) of this section applies to any exchange loss realized on or after December 7, 2016. Paragraph (i) of this section applies to taxable years beginning on or after one year after the first day of the first taxable year following December 7, 2016. Notwithstanding the preceding sentence, if a taxpayer makes an election under § 1.987–11(b), then paragraph (i) of this section applies to taxable years to which §§ 1.987–1 through 1.987–10 apply as a result of such election.

(k) Expiration date. The applicability of this section expires on December 6, 2019.

Back to chapter list
Previous part of code Next part of code
Back to chapter list

Cite this article: FindLaw.com - Code of Federal Regulations Title 26. Internal Revenue § 26.1.988–2T Recognition and computation of exchange gain or loss (temporary) - last updated October 02, 2022 | https://codes.findlaw.com/cfr/title-26-internal-revenue/cfr-sect-26-1-988-2t/

Read this complete Code of Federal Regulations Title 26. Internal Revenue § 26.1.988–2T Recognition and computation of exchange gain or loss (temporary) on Westlaw. Westlaw subscription required.

FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature or via Westlaw before relying on it for your legal needs.

Was this helpful?

Search all Codes

Welcome to FindLaw's Cases & Codes

A free source of state and federal court opinions, state laws, and the United States Code. For more information about the legal concepts addressed by these cases and statutes, visit FindLaw's Learn About the Law.

Go to Learn About the Law

Latest Blog Posts

For Legal Professionals

Learn About the Law

Get help with your legal needs

FindLaw’s Learn About the Law features thousands of informational articles to help you understand your options. And if you’re ready to hire an attorney, find one in your area who can help.

Go to Learn About the Law

Need to find an attorney?

Search our directory by legal issue

Enter information in one or both fields (Required)

Copied to clipboard