26 CFR § 1.901(m)-1T - Definitions (temporary).

§ 1.901(m)-1T Definitions (temporary).

(a) Definitions. For purposes of section 901(m), this section, and §§ 1.901(m)-2T through 1.901(m)-8T, the following definitions apply:

(1)-(5) [Reserved]

(6) The term basis difference has the meaning provided in § 1.901(m)-4T.

(7) The term cost recovery amount has the meaning provided in § 1.901(m)-5T(b)(2).

(8) The term covered asset acquisition (or CAA) has the meaning provided in § 1.901(m)-2T.

(9) [Reserved]

(10) The term disposition means an event (for example, a sale, abandonment, or mark-to-market event) that results in gain or loss being recognized with respect to an RFA for purposes of U.S. income tax or a foreign income tax, or both.

(11) The term disposition amount has the meaning provided in § 1.901(m)-5T(c)(2).

(12) [Reserved]

(13) The term disregarded entity means an entity that is disregarded as an entity separate from its owner, as described in § 301.7701-2(c)(2)(i) of this chapter.

(14) The term fiscally transparent entity means an entity, including a Disregarded Entity, that is fiscally transparent under the principles of § 1.894-1(d)(3) for purposes of U.S. income tax or a foreign income tax (or both).

(15)-(17) [Reserved].

(18) The term foreign disposition gain means, with respect to a foreign income tax, the amount of gain recognized on a disposition of an RFA in determining Foreign Income, regardless of whether the gain is deferred or otherwise not taken into account currently. Notwithstanding the foregoing, if after a section 743(b) CAA there is a disposition of an asset that is an RFA with respect to that section 743(b) CAA, foreign disposition gain has the meaning provided in § 1.901(m)-5T(c)(2)(iii).

(19) The term foreign disposition loss means, with respect to a foreign income tax, the amount of loss recognized on a disposition of an RFA in determining Foreign Income, regardless of whether the loss is deferred or disallowed or otherwise not taken into account currently. Notwithstanding the foregoing, if after a section 743(b) CAA there is a disposition of an asset that is an RFA with respect to that section 743(b) CAA, foreign disposition loss has the meaning provided in § 1.901(m)-5T(c)(2)(iii).

(20) The term foreign income means, with respect to a foreign income tax, the taxable income (or loss) reflected on a foreign tax return (as properly amended or adjusted), even if the taxable income (or loss) is reported by an entity that is a fiscally transparent entity for purposes of the foreign income tax. If, however, foreign law imposes tax on the combined income (within the meaning of § 1.901-2(f)(3)(ii)) of two or more Foreign Payors, foreign income means the combined taxable income (or loss) of such Foreign Payors, regardless of whether such income (or loss) is reflected on a single foreign tax return.

(21) The term foreign income tax means an income, war profits, or excess profits tax for which a credit is allowable under section 901 or 903, except that it does not include any withholding tax determined on a gross basis as described in section 901(k)(1)(B).

(22)-(25) [Reserved]

(26) The term prior CAA has the meaning provided in § 1.901(m)-6T(b)(2).

(27) The term prior section 743(b) CAA has the meaning provided in § 1.901(m)-6T(b)(4)(iii).

(28) The term relevant foreign asset (or RFA) has the meaning provided in § 1.901(m)-2T.

(29)-(32) [Reserved]

(33) The term section 338 CAA has the meaning provided in § 1.901(m)-2T(b)(1).

(34) The term section 743(b) CAA has the meaning provided in § 1.901(m)-2T(b)(3).

(35) [Reserved]

(36) The term subsequent CAA has the meaning provided in § 1.901(m)-6T(b)(4)(i).

(37) The term subsequent section 743(b) CAA has the meaning provided in § 1.901(m)-6T(b)(4)(iii).

(38) The term successor transaction has the meaning provided in § 1.901(m)-6T(b)(2).

(39) [Reserved]

(40) The term unallocated basis difference means, with respect to an RFA and a foreign income tax, the basis difference reduced by the sum of the cost recovery amounts and the disposition amounts that have been computed under § 1.901(m)-5T.

(41) The term U.S. basis means the adjusted basis of an asset determined for U.S. income tax purposes.

(42) [Reserved].

(43) The term U.S. disposition gain means the amount of gain recognized for U.S. income tax purposes on a disposition of an RFA, regardless of whether the gain is deferred or otherwise not taken into account currently. Notwithstanding the foregoing, if after a section 743(b) CAA there is a disposition of an asset that is an RFA with respect to that section 743(b) CAA, U.S. disposition gain has the meaning provided in § 1.901(m)-5T(c)(2)(iii).

(44) The term U.S. disposition loss means the amount of loss recognized for U.S. income tax purposes on a disposition of an RFA, regardless of whether the loss is deferred or disallowed or otherwise not taken into account currently. Notwithstanding the foregoing, if after a section 743(b) CAA there is a disposition of an asset that is an RFA with respect to that section 743(b) CAA, U.S. disposition loss has the meaning provided in § 1.901(m)-5T(c)(2)(iii).

(45) The term U.S. taxable year means a taxable year as defined in section 7701(a)(23).

(b) Effective/applicability date.

(1) [Reserved].

(2) Paragraphs (a)(6), (7), (8), (10), (11), (13), (14), (18), (19), (20), (21), (26), (27), (28), (33), (34), (36), (37), (38), (40), (41), (43), (44), and (45) of this section apply to CAAs occurring on or after July 21, 2014, and to CAAs occurring before that date resulting from an entity classification election made under § 301.7701-3 that is filed on or after July 29, 2014, and that is effective on or before July 21, 2014. Paragraphs (a)(6), (7), (8), (10), (11), (13), (14), (18), (19), (20), (21), (26), (27), (28), (33), (34), (36), (37), (38), (40), (41), (43), (44), and (45) of this section also apply to CAAs occurring on or after January 1, 2011, and before July 21, 2014, other than CAAs occurring before July 21, 2014, resulting from an entity classification election made under § 301.7701-3 that is filed on or after July 29, 2014, and that is effective on or before July 21, 2014, but only if the basis difference (within the meaning of section 901(m)(3)(C)(i)) in one or more RFAs with respect to the CAA had not been fully taken into account under section 901(m)(3)(B) either as of July 21, 2014, or, in the case of an entity classification election made under § 301.7701-3 that is filed on or after July 29, 2014, and that is effective on or before July 21, 2014, prior to the transactions that are deemed to occur under § 301.7701-3(g) as a result of the change in classification.

(3) [Reserved].

(c) Expiration date. The applicability of this section expires on December 6, 2019.

[T.D. 9800, 81 FR 88107, Dec. 7, 2016]