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Abstract: 

Proposed Treasury Regulation 1.988-7 provides taxpayers with an effective way to manage the foreign currency timing whipsaw that funds may encounter when investing in debt instruments overseas. While the proposed regulation is not yet final, the government allows taxpayers to use it for tax years ending on or after December 17, 2017. This article explains Section 988 transactions, and when and how to apply Proposed Treasury Regulation 1.988-7.

Keywords: Prop. Treas. Regs. Sec. 1.988-7, IRC Sec. 988, IRC Sec. 1256

Affiliations:  1: Deloitte Tax LLP.