Treasury Regulations · 26 CFR
§ 1.988-2T. Recognition and computation of exchange gain or loss (temporary).
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. § 988
Cite as 26 CFR § 1.988-2T
At a glance
Read from the text and its source citation. Not part of the regulation.
- Status
- In the current eCFR
- Issued
- December 8, 2016 by T.D. 9795
- Issued under
- 26 U.S.C. § 988
- Length
- 332 words · about 1 min to read
- Cross-references
- cites 4 Code sections and 6 regulations; cited by 1
¶(16) Deferral of loss on certain related-party debt instruments—
¶(i) Treatment of creditor. For rules applicable to a corporation included in a controlled group that is a creditor under a debt instrument see § 1.267(f)-1(e).
¶(ii) Treatment of debtor—
¶(2) The transaction resulting in the realization of exchange loss has as a principal purpose the avoidance of Federal income tax.
¶(B) Recognition of deferred loss. Any exchange loss that is deferred under paragraph (b)(16)(ii)(A) of this section is deferred until the end of the term of the loan, determined immediately prior to the transaction.
¶(i) Special rules for section 988 transactions of a section 987 QBU. For rules regarding section 988 transactions of a section 987 QBU, see § 1.987-3T(b)(4) for section 987 QBUs in general and § 1.987-1T(b)(6) for dollar QBUs.
¶(j) Effective/applicability date. Paragraph (b)(16) of this section applies to any exchange loss realized on or after December 7, 2016. Paragraph (i) of this section applies to taxable years beginning on or after one year after the first day of the first taxable year following December 7, 2016. Notwithstanding the preceding sentence, if a taxpayer makes an election under § 1.987-11(b), then paragraph (i) of this section applies to taxable years to which §§ 1.987-1 through 1.987-10 apply as a result of such election.
¶(k) Expiration date. The applicability of this section expires on December 6, 2019.
[T.D. 9795, 81 FR 88879, Dec. 8, 2016]
Cross-references
Computed from the citations in the text of 26 CFR.
Code sections it cites
- § 267 Losses, expenses, and interest with respect to transactions between related taxpayers
- § 707 Transactions between partner and partnership
- § 988 Treatment of certain foreign currency transactions
- § 987 Branch transactions
Regulations it cites
- § 1.988-2 Recognition and computation of exchange gain or loss.
- § 1.267(f)-1 Controlled groups.
- § 1.987-3T Determination of section 987 taxable income or loss of an owner of a section 987 QBU (temporary).
- § 1.987-1T Scope, definitions, and special rules (temporary).
- § 1.987-11 Suspended section 987 loss relating to certain elections; loss-to-the-extent-of-gain rule.
- § 1.987-1 Scope, definitions, and special rules.
Cited by 1 other regulation
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. 9795 (81 FR 88879)
Where it sits in 26 CFR
- Subchapter A Income tax
- Part 1 Income taxes
- Foreign Currency Transactions
Nearby sections
- § 1.988-0 Taxation of gain or loss from a section 988 transaction; Table of Contents.
- § 1.988-1 Certain definitions and special rules.
- § 1.988-1T Certain definitions and special rules (temporary).
- § 1.988-2 Recognition and computation of exchange gain or loss.
- § 1.988-2T Recognition and computation of exchange gain or loss (temporary).
- § 1.988-3 Character of exchange gain or loss.
- § 1.988-4 Source of gain or loss realized on a section 988 transaction.
- § 1.988-5 Section 988(d) hedging transactions.
- § 1.988-6 Nonfunctional currency contingent payment debt instruments.