Treasury releases foreign currency proposed regulations

In brief

Treasury and the IRS on November 9 released proposed regulations relating to the determination of taxable income or loss and foreign currency gain or loss with respect to a qualified business unit (QBU). The proposed regulations include an election to treat all items of a QBU as marked items (subject to a loss suspension rule), an election to recognize all foreign currency gain or loss with respect to a QBU on an annual basis, and a new transition rule. The proposed regulations are scheduled for publication in the Federal Register on November 14. Public Comments are due within 90 days of publication in the Federal Register. 

Separately, Treasury and the IRS released a Federal Register Notice and are reopening the comment period for 2016 proposed regulations relating to the determination and recognition of taxable income or loss and foreign currency gain or loss with respect to a QBU. 

Observation: Taxpayers should consider submitting comments. PwC will publish a detailed analysis of the proposed regulations within the coming days.