Branch transactions.

• Author: Laffie, Lesli S.
• Position: AICPA Activities

In Notice 2000-20,Treasury and the IRS requested comments by June 19, 2000 on certain issues to be addressed in revised Sec. 987 regulations on foreign currency transactions.To date, the revised regulations have not yet been issued.

In this regard, the AICPA offered comments on qualified business units (QBUs) that are branches, including disregarded entities. (It did not address the Sec. 987 consequences of partnerships, estates or trusts.)

It suggested that the revised regulations (1) provide that no exchange gain or loss be recognized on remittances of capital from a QBU and (2) adopt Regs. Sec. 1.987-5's four-pool approach to determine whether transfers are remittances of earnings or capital.The AICPA also proposed that the revised regulation adopt an annual netting rule and respect the legal...