IRS Finalizes Business Units’ Currency Gains, Losses Rule (2)

The IRS finalized rules Tuesday for how companies’ subsidiaries should treat foreign-currency gains and losses.

The rules (TD 10016, RIN 1545-BO07) deal with how “qualified business units” (QBUs) under Section 987 handle currency transactions and gains and losses in their own taxable income and loss, including the methods for determining such gains and losses. Qualified business units are units of larger companies that do business separately and maintain their own books and records.

The rules finalize regulations proposed in November 2023. They include an election to treat all items of a qualified business unit as marked items, subject ...