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NEW IRS Foreign Currency GuidanceNotice 2017-07

rocky
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Post by rocky on Fri Dec 23, 2016 12:10 pm


NEW IRS Foreign Currency Guidance
Notice 2017-07
 




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Foreign currency guidance under section 987
Notice 2017-07
On December 7, 2016, the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) filed with the Federal Register Treasury Decision 9795, which includes temporary regulations under §1.987-12T relating to the recognition and deferral of foreign currency gain or loss under section 987 with respect to a qualified business unit in connection with a deferral event or outbound loss event. Section 1.987-12T(j)(1) provides that §1.987-12T generally applies to any deferral event or outbound loss event that occurs on or after January 6, 2017. Under §1.987-12T(j)(2), however, §1.987-12T also applies to any deferral event or outbound loss event that occurs on or after December 7, 2016, if such deferral event or outbound loss event is undertaken with a principal purpose of recognizing section 987 gain or loss.
In order to prevent abuse, §1.987-12T(j)(2) will be modified so that §1.987-12T also will apply to any deferral event or outbound loss event that is undertaken with a principal purpose of recognizing section 987 gain or loss and that occurs as a result of an entity classification election made under §301.7701-3 that is filed on or after December 22, 2016, and that is effective before December 7, 2016. Additionally, §1.987-12T(j)(1) will be modified so that §1.987-12T also will apply to any deferral event
or outbound loss event that occurs as a result of an entity classification election made under §301.7701-3 that is filed on or after January 6, 2017, and that is effective before January 6, 2017.
The principal author of this notice is Steven D. Jensen of the Office of Associate Chief Counsel (International). However, other personnel from the Treasury Department and the IRS participated in its development. For further information regarding this notice contact Steven D. Jensen at (202) 317-6938 (not a toll-free call).


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rocky
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Post by rocky on Fri Dec 23, 2016 12:13 pm

the fact that they are doing this RIGHT NOW is pretty ding-dang exciting, if you ask me........
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Post by BILLYB on Fri Dec 23, 2016 12:26 pm

with 2 hours sleep my brian isn't working , so what dose that mean for us Neno
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Post by Preacher Man on Fri Dec 23, 2016 12:27 pm

[You must be registered and logged in to see this link.] wrote:the fact that they are doing this RIGHT NOW is pretty ding-dang exciting, if you ask me........
rocky, I dont post much, but wanted to tell-you Thanks,
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Post by weslin3 on Fri Dec 23, 2016 2:01 pm

[You must be registered and logged in to see this link.] wrote:the fact that they are doing this RIGHT NOW is pretty ding-dang exciting, if you ask me........
Dance banna2 banna3 drunk bounce duck

I totally agree rocky!!
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Post by sassy on Fri Dec 23, 2016 2:08 pm

duck Magic 8 Ball yes
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Post by wciappetta on Fri Dec 23, 2016 2:27 pm

In case anyone is wondering....

Foreign currency bank account: when and how is the exchange rate appreciation taxed by the IRS?

Is appreciation taxed annually or only when converted back into USD? Ordinary income, short-term capital gains, long-term capital gains?

(non-interest bearing personal bank account not used for business purposes or investment purposes)


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[You must be registered and logged in to see this link.] Software Tester, Tax Advisor and Analyst, Baseball Think Factory writer

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The IRS draws a distinction between personal transactions and business transactions, so we only have to look at personal transactions for this question. For personal (non-business) transactions, if you have a gain from a foreign currency transaction you do not include it in income unless it exceeds $200, then you report it as capital gain. If you have a loss, you can't deduct it; personal losses are non-deductible. See [You must be registered and logged in to see this link.] .
 
Bear in mind that you only have a reportable event when you have a foreign currency
transaction - if you have an account in Italy that is denominated in Euros, and you withdraw money from that account to pay a bill that is also denominated in Euros, you don't have a foreign currency transaction. But if you withdraw from that account to pay a bill (or do a wire transfer to a US-based account) that is denominated in US dollars, you do.
 
You also don't have any exchange-rate appreciation on a one-way transaction. If you made a deposit into your account in Italy in Euros and then withdrew and converted it to US dollars, there's no effect. If you originally converted US dollars to Euros, made a deposit to your Italian bank account, and then withdrew Euros for use in Italy, you also have no exchange-rate impact. But if you converted from US dollars to deposit, and then convert back to US dollars after withdrawal, then the exchange rate comes into play.


 

 

 

 

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[You must be registered and logged in to see this link.] For I know the thoughts that I think toward you, saith the LORD, thoughts of peace, and not of evil, to give you an expected end. Then shall ye call upon me, and ye shall go and pray unto me, and I will hearken unto you. And ye shall seek me, and find me, when ye shall search for me with all your heart.
rocky
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Post by rocky on Fri Dec 23, 2016 3:11 pm

good stuff thanks Ward
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Post by weslin3 on Fri Dec 23, 2016 4:32 pm

Ward thanks for helping me on this... I liked it that they were doing something with the timing of all else but didn't understand it. lol
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Post by Lobo on Fri Dec 23, 2016 6:51 pm

WOW, Rocky and Ward, thanks - this is very exciting following on the IMF news about the 2017 budget, etc.

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