Treasury Regulations · 26 CFR
§ 1.986(c)-1. Coordination with section 965.
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. § 986(c)
Cite as 26 CFR § 1.986(c)-1
At a glance
Read from the text and its source citation. Not part of the regulation.
- Status
- In the current eCFR
- Issued
- February 5, 2019 by T.D. 9846
- Issued under
- 26 U.S.C. § 986(c)
- Length
- 225 words · about 1 min to read
- Cross-references
- cites 2 Code sections and 1 regulation; cited by 0
¶(a) Amount of foreign currency gain or loss. Foreign currency gain or loss with respect to distributions of section 965(a) previously taxed earnings and profits (as defined in § 1.965-1(f)(39)) is determined based on movements in the exchange rate between December 31, 2017, and the time such distributions are made.
¶(b) Section 965(a) previously taxed earnings and profits. Any gain or loss recognized under section 986(c) with respect to distributions of section 965(a) previously taxed earnings and profits is reduced in the same proportion as the reduction by a section 965(c) deduction amount (as defined in § 1.965-1(f)(42)) of the section 965(a) inclusion amount (as defined in § 1.965-1(f)(38)) that gave rise to such section 965(a) previously taxed earnings and profits.
¶(c) Section 965(b) previously taxed earnings and profits. Section 986(c) does not apply with respect to distributions of section 965(b) previously taxed earnings and profits (as defined in § 1.965-1(f)(40)).
¶(d) Applicability dates. The section applies beginning the last taxable year of a foreign corporation that begins before January 1, 2018, and with respect to a United States person, for the taxable year in which or with which such taxable year of the foreign corporation ends.
[T.D. 9846, 84 FR 1915, Feb. 5, 2019]
Cross-references
Computed from the citations in the text of 26 CFR.
Code sections it cites
- § 965 Treatment of deferred foreign income upon transition to participation exemption system of taxation
- § 986 Determination of foreign taxes and foreign corporation’s earnings and profits
Regulations it cites
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. 9846 (84 FR 1915)
Where it sits in 26 CFR
- Subchapter A Income tax
- Part 1 Income taxes
- Foreign Currency Transactions
Nearby sections
- § 1.985-6 Transition rules for a QBU that uses the dollar approximate separate transactions method for its first taxable year beginning in 1987.
- § 1.985-7 Adjustments required in connection with a change to DASTM.
- § 1.985-8 Special rules applicable to the European Monetary Union (conversion to euro).
- § 1.986(a)-1 Translation of foreign income taxes for purposes of the foreign tax credit.
- § 1.986(c)-1 Coordination with section 965.
- § 1.987-0 Table of contents.
- § 1.987-1 Scope, definitions, and special rules.
- § 1.987-1T Scope, definitions, and special rules (temporary).
- § 1.987-2 Attribution of items to eligible QBUs; definition of a transfer and related rules.