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26 U.S.C. § 987 — Branch transactions
Federal law — U.S. Code and appendices · legal_authorities
In the case of any taxpayer having 1 or more qualified business units with a functional currency other than the dollar, taxable income of such taxpayer shall be determined—
(1) by computing the taxable income or loss separately for each such unit in its functional currency,
(2) by translating the income or loss separately computed under paragraph (1) at the appropriate exchange rate, and
(3) by making proper adjustments (as prescribed by the Secretary) for transfers of property between qualified business units of the taxpayer having different functional currencies, including—
(A) treating post-1986 remittances from each such unit as made on a pro rata basis out of post-1986 accumulated earnings, and
(B) treating gain or loss determined under this paragraph as ordinary income or loss, respectively, and sourcing such gain or loss by reference to the source of the income giving rise to post-1986 accumulated earnings.
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Stable record: federal_law:legal_authorities:record_usc_d6968096597dc97357cacb23
Source file: Laws/federal/codes/united-states-code/title-26/section-987-branch-transactions--1c5b5aa86e.md
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Source location: Title 26, Chapter 1, § 987; chapter-001-normal-taxes-and-surtaxes.md
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In the case of any taxpayer having 1 or more qualified business units with a functional currency other than the dollar, taxable income of such taxpayer shall be determined—
(1) by computing the taxable income or loss separately for each such unit in its functional currency,
(2) by translating the income or loss separately computed under paragraph (1) at the appropriate exchange rate, and
(3) by making proper adjustments (as prescribed by the Secretary) for transfers of property between qualified business units of the taxpayer having different functional currencies, including—
(A) treating post-1986 remittances from each such unit as made on a pro rata basis out of post-1986 accumulated earnings, and
(B) treating gain or loss determined under this paragraph as ordinary income or loss, respectively, and sourcing such gain or loss by reference to the source of the income giving rise to post-1986 accumulated earnings.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Married individuals filing joint returns and surviving spouses** There is hereby imposed on the taxable income of—
(1) every married individual (as defined in section 7703) who makes a single return jointly with his spouse under section 6013, and
(2) every surviving spouse (as defined in section 2(a)),
a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $36,90015% of taxable income. Over $36,900 but not over $89,150$5,535, plus 28% of the excess over $36,900. Over $89,150 but not over $140,000$20,165, plus 31% of the excess over $89,150. Over $140,000 but not over $250,000$35,928.50, plus 36% of the excess over $140,000. Over $250,000$75,528.50, plus 39.6% of the excess over $250,000.
**(b) Heads of households** There is hereby imposed on the taxable income of every head of a household (as defined in section 2(b)) a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $29,60015% of taxable income. Over $29,600 but not over $76,400$4,440, plus 28% of the excess over $29,600. Over $76,400 but not over $127,500$17,544, plus 31% of the excess over $76,400. Over $127,500 but not over $250,000$33,385, plus 36% of the excess over $127,500. Over $250,000$77,485, plus 39.6% of the excess over $250,000.
**(c) Unmarried individuals (other than surviving spouses and heads of households)** There is hereby imposed on the taxable income of every individual (other than a surviving spouse as defined in section 2(a) or the head of a household as defined in section 2(b)) who is not a married individual (as defined in section 7703) a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $22,10015% of taxable income. Over $22,100 but not over $53,50
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1
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Federal law — U.S. Code and appendices · legal_authorities
**(a) In general** Unless otherwise provided in regulations, all determinations under this subtitle shall be made in the taxpayer’s functional currency.
**(b) Functional currency**
(1) **In general** — For purposes of this subtitle, the term “functional currency” means—
(A) except as provided in subparagraph (B), the dollar, or
(B) in the case of a qualified business unit, the currency of the economic environment in which a significant part of such unit’s activities are conducted and which is used by such unit in keeping its books and records.
(2) **Functional currency where activities primarily conducted in dollars** — The functional currency of any qualified business unit shall be the dollar if activities of such unit are primarily conducted in dollars.
(3) **Election** — To the extent provided in regulations, the taxpayer may elect to use the dollar as the functional currency for any qualified business unit if—
(A) such unit keeps its books and records in dollars, or
(B) the taxpayer uses a method of accounting that approximates a separate transactions method.
Any such election shall apply to the taxable year for which made and all subsequent taxable years unless revoked with the consent of the Secretary.
(4) **Change in functional currency treated as a change in method of accounting** — Any change in the functional currency shall be treated as a change in the taxpayer’s method of accounting for purposes of section 481 under procedures to be established by the Secretary.
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 985
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Federal law — U.S. Code and appendices · legal_authorities
Page 2226
TITLE 26—INTERNAL REVENUE CODE
§ 987
(2) in the case of any United States person,
the earnings and profits determined under
paragraph (1) (when distributed, deemed dis-
tributed, or otherwise taken into account
under this subtitle) shall (if necessary) be
translated into dollars using the appropriate
exchange rate.
(c) Previously taxed earnings and profits
(1) In general
Foreign currency gain or loss with respect to
distributions of previously taxed earnings and
profits (as described in section 959 or 1293(c))
attributable to movements in exchange rates
between the times of deemed and actual dis-
tribution shall be recognized and treated as
ordinary income or loss from the same source
as the associated income inclusion.
(2) Distributions through tiers
The Secretary shall prescribe regulations
with respect to the treatment of distributions
of previously taxed earnings and profits
through tiers of foreign corporations.
(Added Pub. L. 99–514, title XII, § 1261(a), Oct. 22,
1986, 100 Stat. 2586; amended Pub. L. 100–647, title
I, § 1012(v)(1)(A), Nov. 10, 1988, 102 Stat. 3528; Pub.
L. 105–34, title XI, § 1102(a)(1), (b)(1), Aug. 5, 1997,
111 Stat. 963, 965; Pub. L. 108–357, title IV,
§ 408(a), (b), Oct. 22, 2004, 118 Stat. 1499.)
Editorial Notes
AMENDMENTS
2004—Subsec. (a)(1)(D). Pub. L. 108–357, § 408(a), added
subpar. (D). Former subpar. (D) redesignated (E).
Subsec. (a)(1)(E). Pub. L. 108–357, § 408(b)(1), added sub-
par. (E). Former subpar. (E) redesignated (F).
Pub. L. 108–357, § 408(a), redesignated subpar. (D) as
(E).
Subsec. (a)(1)(F). Pub. L. 108–357, § 408(b)(1), redesig-
nated subpar. (E) as (F).
Subsec. (a)(2). Pub. L. 108–357, § 408(b)(2), inserted ‘‘or
(E)’’ after ‘‘subparagraph (A)’’ in introductory provi-
sions.
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Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 987
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