The US IRS on May 13 published final tax regulations applicable to multinationals concerning combinations and separations of qualified business units (QBUs) that are subject to section 987 and the recognition and deferral of foreign currency gain or loss with respect to a QBU subject to section 987 in connection with certain QBU terminations and certain other transactions involving partnerships.
The IRS has also withdrawn temporary regulations regulation § 1.987-7T which provides a liquidation value percentage methodology for allocating assets and liabilities of certain partnerships (section 987 aggregate partnerships, as defined in § 1.987-1(b)(5) of the 2016 final regulations).
The IRS and Treasury said the government continues to study provisions in the deleted temporary regulations that are not addressed in the new final regs.
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