26 U.S.C. § 987 : US Code - Section 987: Branch transactions

Search 26 U.S.C. § 987 : US Code - Section 987: Branch transactions

In the case of any taxpayer having 1 or more qualified business
units with a functional currency other than the dollar, taxable
income of such taxpayer shall be determined -
(1) by computing the taxable income or loss separately for each
such unit in its functional currency,
(2) by translating the income or loss separately computed under
paragraph (1) at the appropriate exchange rate, and
(3) by making proper adjustments (as prescribed by the
Secretary) for transfers of property between qualified business
units of the taxpayer having different functional currencies,
including -
(A) treating post-1986 remittances from each such unit as
made on a pro rata basis out of post-1986 accumulated earnings,
and
(B) treating gain or loss determined under this paragraph as
ordinary income or loss, respectively, and sourcing such gain
or loss by reference to the source of the income giving rise to
post-1986 accumulated earnings.