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Treasury Regulations · 26 CFR Part 1

Foreign Currency Transactions (§§ 1.985-0 to 1.989(b)-1)

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 Title 26 on ecfr.gov (external site) or the official annual CFR on govinfo (external site).

  1. § 1.985-0 Outline of regulation.
  2. § 1.985-1 Functional currency.
  3. § 1.985-2 Election to use the United States dollar as the functional currency of a QBU.
  4. § 1.985-3 United States dollar approximate separate transactions method.
  5. § 1.985-4 Method of accounting.
  6. § 1.985-5 Adjustments required upon change in functional currency.
  7. § 1.985-6 Transition rules for a QBU that uses the dollar approximate separate transactions method for its first taxable year beginning in 1987.
  8. § 1.985-7 Adjustments required in connection with a change to DASTM.
  9. § 1.985-8 Special rules applicable to the European Monetary Union (conversion to euro).
  10. § 1.986(a)-1 Translation of foreign income taxes for purposes of the foreign tax credit.
  11. § 1.986(c)-1 Coordination with section 965.
  12. § 1.987-0 Table of contents.
  13. § 1.987-1 Scope, definitions, and special rules.
  14. § 1.987-1T Scope, definitions, and special rules (temporary).
  15. § 1.987-2 Attribution of items to eligible QBUs; definition of a transfer and related rules.
  16. § 1.987-3 Determination of section 987 taxable income or loss of an owner of a section 987 QBU.
  17. § 1.987-3T Determination of section 987 taxable income or loss of an owner of a section 987 QBU (temporary).
  18. § 1.987-4 Determination of net unrecognized section 987 gain or loss of a section 987 QBU.
  19. § 1.987-5 Recognition of section 987 gain or loss.
  20. § 1.987-6 Character and source of section 987 gain or loss.
  21. § 1.987-6T Character and source of section 987 gain or loss (temporary).
  22. § 1.987-7 Application of the section 987 regulations to partnerships and S corporations.
  23. § 1.987-8 Termination of a section 987 QBU.
  24. § 1.987-8T Termination of a section 987 QBU (temporary).
  25. § 1.987-9 Recordkeeping requirements.
  26. § 1.987-10 Transition rules.
  27. § 1.987-11 Suspended section 987 loss relating to certain elections; loss-to-the-extent-of-gain rule.
  28. § 1.987-12 Deferral of section 987 gain or loss.
  29. § 1.987-13 Suspended section 987 loss upon terminations.
  30. § 1.987-14 Section 987 hedging transactions.
  31. § 1.987-15 Applicability date.
  32. § 1.988-0 Taxation of gain or loss from a section 988 transaction; Table of Contents.
  33. § 1.988-1 Certain definitions and special rules.
  34. § 1.988-1T Certain definitions and special rules (temporary).
  35. § 1.988-2 Recognition and computation of exchange gain or loss.
  36. § 1.988-2T Recognition and computation of exchange gain or loss (temporary).
  37. § 1.988-3 Character of exchange gain or loss.
  38. § 1.988-4 Source of gain or loss realized on a section 988 transaction.
  39. § 1.988-5 Section 988(d) hedging transactions.
  40. § 1.988-6 Nonfunctional currency contingent payment debt instruments.
  41. § 1.989(a)-1 Definition of a qualified business unit.
  42. § 1.989(b)-1 Definition of weighted average exchange rate.