Internal Revenue Code · 26 U.S.C.

§ 91. Certain foreign branch losses transferred to specified 10-percent owned foreign corporations

In force Text current through Public Law 119-121 (October 9, 2026) release point 119-121

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. § 91

At a glance

Read from the text, the source credit and the official notes. Not part of the law.

Status: In force
Added: December 22, 2017 by Pub. L. 115–97
Length: 5 subsections · 356 words · about 2 min to read
Defines: 1 term
Cross-references: cites 3; cited by 0 Code sections and 1 other regulation

¶(a) In general

If a domestic corporation transfers substantially all of the assets of a foreign branch (within the meaning of section 367(a)(3)(C), as in effect before the date of the enactment of the Tax Cuts and Jobs Act) to a specified 10-percent owned foreign corporation (as defined in section 245A) with respect to which it is a United States shareholder after such transfer, such domestic corporation shall include in gross income for the taxable year which includes such transfer an amount equal to the transferred loss amount with respect to such transfer.

¶(b) Transferred loss amount For purposes of this section, the term “transferred loss amount” means, with respect to any transfer of substantially all of the assets of a foreign branch, the excess (if any) of—

¶(1) the sum of losses—

¶(A) which were incurred by the foreign branch after December 31, 2017, and before the transfer, and

¶(B) with respect to which a deduction was allowed to the taxpayer, over

¶(2) the sum of—

¶(A) any taxable income of such branch for a taxable year after the taxable year in which the loss was incurred and through the close of the taxable year of the transfer, and

¶(B) any amount which is recognized under section 904(f)(3) on account of the transfer.

¶(c) Reduction for recognized gains

The transferred loss amount shall be reduced (but not below zero) by the amount of gain recognized by the taxpayer on account of the transfer (other than amounts taken into account under subsection (b)(2)(B)).

¶(d) Source of income

Amounts included in gross income under this section shall be treated as derived from sources within the United States.

¶(e) Basis adjustments

Consistent with such regulations or other guidance as the Secretary shall prescribe, proper adjustments shall be made in the adjusted basis of the taxpayer’s stock in the specified 10-percent owned foreign corporation to which the transfer is made, and in the transferee’s adjusted basis in the property transferred, to reflect amounts included in gross income under this section.

(Added Pub. L. 115–97, title I, § 14102(d)(1), Dec. 22, 2017, 131 Stat. 2193.)

Terms defined here

Where the text says “the term … means”. Select a term to jump to its definition.

transferred loss amount § 91(b)

Cross-references

Computed from the citations in the text of Title 26 and 26 CFR.

This section cites 3 other sections

Cited in 1 regulation not issued under it

§ 1.904(g)-3 Ordering rules for the allocation of net operating losses, net capital losses, U.S. source losses, and separate limitation losses, and for the recapture of separate limitation losses, overall foreign losses, and overall domestic losses.

Amendment history

From the source credit and the official notes, newest first.

December 22, 2017Added by Pub. L. 115–97

Where it sits in the Code

Nearby sections

§ 87 Alcohol and biodiesel fuels credits
§ 88 Certain amounts with respect to nuclear decommissioning costs
§ 89 Repealed
§ 90 Illegal Federal irrigation subsidies
§ 91 Certain foreign branch losses transferred to specified 10-percent owned foreign corporations

Official notes

Show the Law Revision Counsel's notes (amendments, effective dates)

Editorial Notes

References in Text

The date of the enactment of the Tax Cuts and Jobs Act, referred to in subsec. (a), probably means the date of enactment of title I of Pub. L. 115–97, which was approved Dec. 22, 2017. Prior versions of the bill that was enacted into law as Pub. L. 115–97 included such Short Title, but it was not enacted as part of title I of Pub. L. 115–97.

Effective Date

Pub. L. 115–97, title I, § 14102(d)(3), Dec. 22, 2017, 131 Stat. 2194, provided that: “The amendments made by this subsection [enacting this section] shall apply to transfers after December 31, 2017.”

Transition Rule

Pub. L. 115–97, title I, § 14102(d)(4), Dec. 22, 2017, 131 Stat. 2194, provided that: “The amount of gain taken into account under section 91(c) of the Internal Revenue Code of 1986, as added by this subsection, shall be reduced by the amount of gain which would be recognized under section 367(a)(3)(C) (determined without regard to the amendments made by subsection (e) [amending section 367 of this title]) with respect to losses incurred before January 1, 2018.”