Treasury Regulations · 26 CFR
§ 1.907(d)-1. Disregard of posted prices for purposes of chapter 1 of the Code (for taxable years beginning after December 31, 1982).
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. § 907(d)
Cite as 26 CFR § 1.907(d)-1
At a glance
Read from the text and its source citation. Not part of the regulation.
- Status
- In the current eCFR
- Issued
- March 15, 1991 by T.D. 8338
- Issued under
- 26 U.S.C. § 907(d)
- Length
- 575 words · about 2 min to read
- Defines
- 3 terms
- Cross-references
- cites 2 Code sections and 2 regulations; cited by 2
¶(a) In general—
¶(i) Acquisition (other than from a foreign government) or
¶(ii) Disposition of minerals at a posted price that differs from the fair market value at the time of the transaction. Also, if a seller (other than a foreign government) derives FOGEI upon a disposition described in the preceding sentence, section 907(d) applies to the acquisition by the purchaser whether or not the purchaser has FOGEI. Thus, section 907(d) may apply in determining a person's FORI.
¶(2) Initial computation requirement. If section 907(d) applies to any person, income on the transaction as initially reflected on the person's return shall be computed as if the transaction were effected at fair market value. This requirement applies the first time a person has taxable income derived from either the transaction or an item (such as a dividend described in section 907(c)(3)(A)) determined with reference to that income.
¶(3) Burden of proof. The taxpayer must be able to demonstrate the transaction as it actually occurred and the basis for reporting the transaction under the principles of paragraph (a)(2) of this section.
¶(4) Related parties. Section 907(d) (as a rule of characterization) applies whether or not the parties to the transaction are related. Thus, the excess of the posted price over the fair market value may never be taken into account in determining a person's FOGEI under section 907(a) but may be taken into account in determining a person's FORI.
¶(b) Adjustments. If a taxpayer does not comply with the initial requirement of paragraph (a)(2) of this section, adjustments under section 907(d) may be made only by the Commissioner in the same manner that section 482 is administered. Correlative and similar adjustments consistent with the substantive and procedural principles of section 482 and § 1.482-1(d) apply. However, section 907(d) is not a limitation on section 482. If a taxpayer disposing of minerals at a posted price does comply with the initial computation requirement of this section, adjustments and correlative and similar adjustments consistent with the substantive and procedural aspects of section 482 and § 1.482-1(d) shall apply, whether made on the return by the taxpayer or on a later audit. This paragraph (b) does not apply to an actual sale or exchange of minerals made between persons with respect to whom adjustments under section 482 would never apply (but see paragraph (a)(4) of this section).
¶(c) Definitions. For purposes of this section—
¶(1) Foreign government. The term foreign government means only the integral parts or controlled entities of a foreign sovereign and political subdivisions of a foreign country.
¶(3) Posted price. The term posted price means the price set by, or at the direction of, a foreign government to calculate income for purposes of its tax or at which minerals must be sold.
¶(5) Fair market value. The term fair market value, whether or not at the port prior to export, is determined in the same way that the wellhead price is determined under § 1.907(c)-1(b)(6).
[T.D. 8338, 56 FR 11075, Mar. 15, 1991]
Terms defined here
Where the text says “the term … means”. Select a term to jump to its definition.
Cross-references
Computed from the citations in the text of 26 CFR.
Code sections it cites
- § 907 Special rules in case of foreign oil and gas income
- § 482 Allocation of income and deductions among taxpayers
Regulations it cites
- § 1.482-1 Allocation of income and deductions among taxpayers.
- § 1.907(c)-1 Definitions relating to FOGEI and FORI (for taxable years beginning after December 31, 1982).
Cited by 2 other regulations
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. 8338 (56 FR 11075)
Where it sits in 26 CFR
- Subchapter A Income tax
- Part 1 Income taxes
- Foreign tax credit
Nearby sections
- § 1.907(b)-1 Reduction of creditable FORI taxes (for taxable years beginning after December 31, 1982).
- § 1.907(c)-1 Definitions relating to FOGEI and FORI (for taxable years beginning after December 31, 1982).
- § 1.907(c)-2 Section 907(c)(3) items (for taxable years beginning after December 31, 1982).
- § 1.907(c)-3 FOGEI and FORI taxes (for taxable years beginning after December 31, 1982).
- § 1.907(d)-1 Disregard of posted prices for purposes of chapter 1 of the Code (for taxable years beginning after December 31, 1982).
- § 1.907(f)-1 Carryback and carryover of credits disallowed by section 907(a) (for amounts carried between taxable years that each begin after December 31, 1982).