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Title 26

Displaying title 26, up to date as of 9/10/2026. Title 26 was last amended 9/08/2026.
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  1. Title 26 —Internal Revenue
  2. Chapter I —Internal Revenue Service, Department of the Treasury
  3. Subchapter A —Income Tax
  4. Part 1 —Income Taxes
  5. Foreign Currency Transactions   View Full Text
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Title 26Internal RevenuePart / Section
Chapter IInternal Revenue Service, Department of the Treasury1 – 899
Subchapter AIncome Tax1 – 18
Part 1Income Taxes1.0-1 – 1.9300-1
Foreign Currency Transactions1.985-0 – 1.989(b)-1
§ 1.985-0Outline of regulation.
§ 1.985-1Functional currency.
§ 1.985-2Election to use the United States dollar as the functional currency of a QBU.
§ 1.985-3United States dollar approximate separate transactions method.
§ 1.985-4Method of accounting.
§ 1.985-5Adjustments required upon change in functional currency.
§ 1.985-6Transition rules for a QBU that uses the dollar approximate separate transactions method for its first taxable year beginning in 1987.
§ 1.985-7Adjustments required in connection with a change to DASTM.
§ 1.985-8Special rules applicable to the European Monetary Union (conversion to euro).
§ 1.986(a)-1Translation of foreign income taxes for purposes of the foreign tax credit.
§ 1.986(c)-1Coordination with section 965.
§ 1.987-0Table of contents.
§ 1.987-1Scope, definitions, and special rules.
§ 1.987-1TScope, definitions, and special rules (temporary).
§ 1.987-2Attribution of items to eligible QBUs; definition of a transfer and related rules.
§ 1.987-3Determination of section 987 taxable income or loss of an owner of a section 987 QBU.
§ 1.987-3TDetermination of section 987 taxable income or loss of an owner of a section 987 QBU (temporary).
§ 1.987-4Determination of net unrecognized section 987 gain or loss of a section 987 QBU.
§ 1.987-5Recognition of section 987 gain or loss.
§ 1.987-6Character and source of section 987 gain or loss.
§ 1.987-6TCharacter and source of section 987 gain or loss (temporary).
§ 1.987-7Application of the section 987 regulations to partnerships and S corporations.
§ 1.987-8Termination of a section 987 QBU.
§ 1.987-8TTermination of a section 987 QBU (temporary).
§ 1.987-9Recordkeeping requirements.
§ 1.987-10Transition rules.
§ 1.987-11Suspended section 987 loss relating to certain elections; loss-to-the-extent-of-gain rule.
§ 1.987-12Deferral of section 987 gain or loss.
§ 1.987-13Suspended section 987 loss upon terminations.
§ 1.987-14Section 987 hedging transactions.
§ 1.987-15Applicability date.
§ 1.988-0Taxation of gain or loss from a section 988 transaction; Table of Contents.
§ 1.988-1Certain definitions and special rules.
§ 1.988-1TCertain definitions and special rules (temporary).
§ 1.988-2Recognition and computation of exchange gain or loss.
§ 1.988-2TRecognition and computation of exchange gain or loss (temporary).
§ 1.988-3Character of exchange gain or loss.
§ 1.988-4Source of gain or loss realized on a section 988 transaction.
§ 1.988-5Section 988(d) hedging transactions.
§ 1.988-6Nonfunctional currency contingent payment debt instruments.
§ 1.989(a)-1Definition of a qualified business unit.
§ 1.989(b)-1Definition of weighted average exchange rate.
eCFR Content