I.R.C. § 91(a) In General
If a domestic corporation transfers substantially all of the assets of a foreign branch
(within the meaning of section 367(a)(3)(C), as in effect before the date of the enactment of the Tax Cuts and Jobs Act) to a
specified 10-percent owned foreign corporation (as defined in section 245A) with respect to which it is a United States shareholder after such transfer, such
domestic corporation shall include in gross income for the taxable year which includes
such transfer an amount equal to the transferred loss amount with respect to such
I.R.C. § 91(b) Transferred Loss Amount
For purposes of this section, the term “transferred loss amount” means, with respect
to any transfer of substantially all of the assets of a foreign branch, the excess
(if any) of—
I.R.C. § 91(b)(2)
the sum of—
I.R.C. § 91(b)(2)(A)
any taxable income of such branch for a taxable year after the taxable year in which
the loss was incurred and through the close of the taxable year of the transfer, and
I.R.C. § 91(b)(2)(B)
any amount which is recognized under
section 904(f)(3) on account of the transfer.
I.R.C. § 91(c) Reduction For Recognized Gains
The transferred loss amount shall be reduced (but not below zero) by the amount of
gain recognized by the taxpayer on account of the transfer (other than amounts taken
into account under subsection (b)(2)(B)).
I.R.C. § 91(d) Source Of Income
Amounts included in gross income under this section shall be treated as derived from
sources within the United States.
I.R.C. § 91(e) Basis Adjustments
Consistent with such regulations or other guidance as the Secretary shall prescribe,
proper adjustments shall be made in the adjusted basis of the taxpayer's stock in
the specified 10-percent owned foreign corporation to which the transfer is made,
and in the transferee's adjusted basis in the property transferred, to reflect amounts
included in gross income under this section.
(Added by Pub. L. 115-97, title I, Sec. 14102(d)(1), Dec. 22, 2017, 131 Stat. 2054.)
Effective for transfers after December 31, 2017.
Sec. 14102(d)(4) of Pub. L. 115-97, provided the following:
“(4) TRANSITION RULE.—The amount of gain taken into account under section 91(c) of the Internal Revenue Code of 1986, as added by this subsection, shall be reduced by the amount of gain which
would be recognized under section 367(a)(3)(C) (determined without regard to the amendments
made by subsection (e)) with respect to losses incurred before January 1, 2018.”