Internal Revenue Code · 26 U.S.C.
§ 6038B. Notice of certain transfers to foreign persons
Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).
Cite as 26 U.S.C. § 6038B
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Added
- July 18, 1984 by Pub. L. 98–369
- Last amended
- December 21, 2005 by Pub. L. 109–135
- Amendments
- 3 dated changes in the source credit
- Length
- 3 subsections · 490 words · about 2 min to read
- Cross-references
- cites 5; cited by 0 Code sections and 11 other regulations
- Regulations
- 3 issued under this section
If by reason of an adjustment under section 482 or otherwise, a contribution described in subsection (a)(1) is deemed to have been made, such contribution shall be treated for purposes of this section as having been made not earlier than the date specified by the Secretary.
If any United States person fails to furnish the information described in subsection (a) at the time and in the manner required by regulations, such person shall pay a penalty equal to 10 percent of the fair market value of the property at the time of the exchange (and, in the case of a contribution described in subsection (a)(1)(B), such person shall recognize gain as if the contributed property had been sold for such value at the time of such contribution).
Paragraph (1) shall not apply to any failure if the United States person shows such failure is due to reasonable cause and not to willful neglect.
The penalty under paragraph (1) with respect to any exchange shall not exceed $100,000 unless the failure with respect to such exchange was due to intentional disregard.
(Added Pub. L. 98–369, div. A, title I, § 131(d)(1), July 18, 1984, 98 Stat. 664; amended Pub. L. 105–34, title XI, § 1144(a)–(c), Aug. 5, 1997, 111 Stat. 984, 985; Pub. L. 105–206, title VI, § 6011(g), July 22, 1998, 112 Stat. 818; Pub. L. 109–135, title IV, § 409(c), Dec. 21, 2005, 119 Stat. 2636.)
Regulations under this section
Treasury regulations (26 CFR) issued under § 6038B
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 5 other sections
- § 332 Complete liquidations of subsidiaries
- § 721 Nonrecognition of gain or loss on contribution
- § 336 Gain or loss recognized on property distributed in complete liquidation
- § 6046A(d) Returns as to interests in foreign partnerships
- § 482 Allocation of income and deductions among taxpayers
Cited in 11 regulations not issued under it
- § 1.367(a)-1 Transfers to foreign corporations subject to section 367(a): In general.
- § 1.367(a)-2 Exceptions for transfers of property for use in the active conduct of a trade or business.
- § 1.367(a)-3 Treatment of transfers of stock or securities to foreign corporations.
- § 1.367(a)-7 Outbound transfers of property described in section 361(a) or (b).
- § 1.367(a)-8 Gain recognition agreement requirements.
- § 1.367(d)-1T Transfers of intangible property to foreign corporations (temporary).
- § 1.367(e)-1 Distributions described in section 367(e)(1).
- § 1.367(e)-2 Distributions described in section 367(e)(2).
- § 1.721(c)-6 Procedural and reporting requirements.
- § 1.6038-3 Information returns required of certain United States persons with respect to controlled foreign partnerships (CFPs).
- § 1.6046A-1 Return requirement for United States persons who acquire or dispose of an interest in a foreign partnership, or whose proportional interest in a foreign partnership changes substantially.
Amendment history
From the source credit and the official notes, newest first.
Where it sits in the Code
- Subtitle F Procedure and Administration
- Chapter 61 INFORMATION AND RETURNS
- Subchapter A Returns and Records
- Part III INFORMATION RETURNS
- Subpart A Information Concerning Persons Subject to Special Provisions
Nearby sections
- § 6036 Notice of qualification as executor or receiver
- § 6037 Return of S corporation
- § 6038 Information reporting with respect to certain foreign corporations and partnerships
- § 6038A Information with respect to certain foreign-owned corporations
- § 6038B Notice of certain transfers to foreign persons
- § 6038C Information with respect to foreign corporations engaged in U.S. business
- § 6038D Information with respect to foreign financial assets
- § 6038E Information with respect to assignment of lower rates or refunds by foreign producers of beer, wine, and distilled spirits
- § 6039 Returns required in connection with certain options
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
Amendments
2005—Subsec. (a)(1)(B). Pub. L. 109–135 inserted “or” at end.
1998—Subsec. (c). Pub. L. 105–206, § 6011(g), made technical amendment to directory language of Pub. L. 105–206, § 1144(c). See 1997 Amendment note below.
1997—Subsec. (a)(1). Pub. L. 105–34, § 1144(a), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “transfers property to a foreign corporation in an exchange described in section 332, 351, 354, 355, 356, or 361, or”.
Subsec. (b). Pub. L. 105–34, § 1144(b), added subsec. (b). Former subsec. (b) redesignated (c).
Subsec. (c). Pub. L. 105–34, § 1144(c), as amended by Pub. L. 105–206, § 6011(g), substituted “equal to 10 percent of the fair market value of the property at the time of the exchange (and, in the case of a contribution described in subsection (a)(1)(B), such person shall recognize gain as if the contributed property had been sold for such value at the time of such contribution)” for “equal to 25 percent of the amount of the gain realized on the exchange” in par. (1) and added par. (3).
Pub. L. 105–34, § 1144(b), redesignated subsec. (b) as (c).
Statutory Notes and Related Subsidiaries
Effective Date of 2005 Amendment
Amendment by Pub. L. 109–135 effective as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 409(d) of Pub. L. 109–135, set out as a note under section 961 of this title.
Effective Date of 1998 Amendment
Amendment by Pub. L. 105–206 effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 6024 of Pub. L. 105–206, set out as a note under section 1 of this title.
Effective Date of 1997 Amendment
Pub. L. 105–34, title XI, § 1144(d)(1), Aug. 5, 1997, 111 Stat. 985, provided that: “The amendments made by this section [amending this section] shall apply to transfers made after the date of the enactment of this Act [Aug. 5, 1997].”
Effective Date
Section applicable to transfers or exchanges after Dec. 31, 1984, in taxable years ending after such date, with special rules for certain transfers and ruling requests before Mar. 1, 1984, see section 131(g) of Pub. L. 98–369, set out as an Effective Date of 1984 Amendment note under section 367 of this title.
Election of Retroactive Effect
Pub. L. 105–34, title XI, § 1144(d)(2), Aug. 5, 1997, 111 Stat. 985, provided that: “Section 1494(c) of the Internal Revenue Code of 1986 shall not apply to any transfer after August 20, 1996, if all applicable reporting requirements under section 6038B of such Code (as amended by this section) are satisfied. The Secretary of the Treasury or his delegate may prescribe simplified reporting requirements under the preceding sentence.”