Treasury Regulations · 26 CFR
§ 1.904(f)-8. Recapture of separate limitation loss accounts.
Regulation text, no changes From the eCFR, current as of October 15, 2026. The eCFR is an authoritative but unofficial editorial compilation of the Code of Federal Regulations; the official text is the annual CFR on govinfo. Compare it with this section on ecfr.gov (external site) or the official annual CFR on govinfo (external site).
Regulation under 26 U.S.C. § 904(f)
Cite as 26 CFR § 1.904(f)-8
At a glance
Read from the text and its source citation. Not part of the regulation.
- Status
- In the current eCFR
- Issued
- June 22, 2012 by T.D. 9595
- Issued under
- 26 U.S.C. § 904(f)
- Length
- 392 words · about 2 min to read
- Cross-references
- cites 1 Code section and 2 regulations; cited by 3
¶(a) In general. A taxpayer shall recapture a separate limitation loss account as provided in this section. If the taxpayer has a separate limitation loss account or accounts in any separate category (the “loss category”) and the loss category has income in a subsequent taxable year, the income shall be recharacterized as income in that other category or categories. The amount of income recharacterized shall not exceed the aggregate balance in all separate limitation loss accounts for the loss category as determined under § 1.904(f)-7. If the taxpayer has more than one separate limitation loss account in a loss category, and there is not enough income in the loss category to recapture all of the loss accounts, then separate limitation income in the loss category shall be recharacterized as separate limitation income in the other separate categories on a proportionate basis. This is determined by multiplying the total separate limitation income subject to recharacterization by a fraction, the numerator of which is the amount in a particular separate limitation loss account and the denominator of which is the total amount in all separate limitation loss accounts for the loss category.
¶(b) Effect of recharacterization of separate limitation income on associated taxes. Recharacterization of income under paragraph (a) of this section shall not result in the recharacterization of any tax. The rules of § 1.904-6, including the rules that the taxes are allocated on an annual basis and that foreign taxes paid on U.S. source income shall be allocated to the separate category that includes that U.S. source income (see § 1.904-6(a)), shall apply for purposes of allocating taxes to separate categories. Allocation of taxes pursuant to § 1.904-6 shall be made before the recapture of any separate limitation loss accounts of the taxpayer pursuant to the rules of this section.
¶(c) Effective/applicability date. This section applies to taxpayers that sustain separate limitation losses in taxable years beginning on or after January 1, 2012. Taxpayers may choose to apply this section to separate limitation losses sustained in other taxable years beginning after December 21, 2007, including periods covered by 26 CFR § 1.904(f)-8T (revised as of April 1, 2010). For rules relating to taxable years beginning after December 31, 1986, and on or before December 21, 2007, see section 904(f)(5).
[T.D. 9595, 77 FR 37580, June 22, 2012]
Cross-references
Computed from the citations in the text of 26 CFR.
Code sections it cites
Regulations it cites
- § 1.904(f)-7 Separate limitation loss and the separate limitation loss account.
- § 1.904-6 Allocation and apportionment of foreign income taxes.
Cited by 3 other regulations
- § 1.904(f)-0 Outline of regulation provisions.
- § 1.904(f)-7 Separate limitation loss and the separate limitation loss account.
- § 1.904(g)-3 Ordering rules for the allocation of net operating losses, net capital losses, U.S. source losses, and separate limitation losses, and for the recapture of separate limitation losses, overall foreign losses, and overall domestic losses.
Amendment history
From the source citation at the end of the section, newest first. T.D. is a Treasury decision; FR is the Federal Register.
- Issued by T.D. 9595 (77 FR 37580)
Where it sits in 26 CFR
- Subchapter A Income tax
- Part 1 Income taxes
- Foreign tax credit
Nearby sections
- § 1.904(f)-4 Recapture of foreign losses out of accumulation distributions from a foreign trust.
- § 1.904(f)-5 Special rules for recapture of overall foreign losses of a domestic trust.
- § 1.904(f)-6 Transitional rule for recapture of FORI and general limitation overall foreign losses incurred in taxable years beginning before January 1, 1983, from foreign source taxable income subject to the general limitation in taxable years beginning after December 31, 1982.
- § 1.904(f)-7 Separate limitation loss and the separate limitation loss account.
- § 1.904(f)-8 Recapture of separate limitation loss accounts.
- § 1.904(f)-12 Transition rules.
- § 1.904(g)-0 Outline of regulation provisions.
- § 1.904(g)-1 Overall domestic loss and the overall domestic loss account.
- § 1.904(g)-2 Recapture of overall domestic losses.