Sec. 1.904(f)-0 Outline of regulation provisions.
This section lists the headings for §§ 1.904(f)-1 through 1.904(f)-8 and 1.904(f)-12.
Section 1.904(f)-1 OVERALL FOREIGN LOSS AND THE OVERALL FOREIGN LOSS ACCOUNT.
(a)
(1) Overview of regulations.
(2) Application to post-1986 taxable years.
(b) Overall foreign loss accounts.
(c) Determination of a taxpayer's overall foreign loss.
(1) Overall foreign loss defined.
(2) Separate limitation defined.
(3) Method of allocation and apportionment of deductions.
(d) Additions to the overall foreign loss account.
(1) General rule.
(2) Overall foreign losses of another taxpayer.
(3) Additions to overall foreign loss account created by loss carryovers.
(4) Adjustments for capital gains and losses.
(e) Reductions of overall foreign loss accounts.
(1) Pre-recapture reduction for amounts allocated to other taxpayers.
(2) Reduction for amounts recaptured.
(f) Illustrations.
(g) Effective/applicability date.
Section 1.904(f)-2 RECAPTURE OF OVERALL FOREIGN LOSSES.
(a) In general.
(b) Determination of taxable income from sources without the United States for purposes of recapture.
(1) In general.
(c) Section 904(f)(1) recapture.
(1) In general.
(2) Election to recapture more of the overall foreign loss than is required under paragraph (c)(1).
(3) Special rule for recapture of losses incurred prior to section 936 election.
(4) Recapture of pre-1983 overall foreign losses determined on a combined basis.
(5) Illustrations.
(d) Recapture of overall foreign losses from dispositions under section 904(f)(3).
(1) In general.
(2) Treatment of net capital gain.
(3) Dispositions where gain is recognized irrespective of section 904(f)(3).
(i) Foreign source gain.
(ii) U.S. source gain.
(4) Dispositions in which gain would not otherwise be recognized.
(i) Recognition of gain to the extent of the overall foreign loss account.
(ii) Basis adjustment.
(iii) Recapture of overall foreign loss to the extent of amount recognized.
(iv) Priorities among dispositions in which gain is deemed to be recognized.
(5) Definitions.
(i) Disposition.
(ii) Property used in a trade or business.
(iii) Property used predominantly outside the United States.
(iv) Property which is a material factor in the realization of income.
(6) Carryover of overall foreign loss accounts in a corporate acquisition to which section 381(a) applies.
(7) Illustrations.
(e) Effective/applicability.
Section 1.904(f)-3 ALLOCATION OF NET OPERATING LOSSES AND NET CAPITAL LOSSES.
Section 1.904(f)-4 RECAPTURE OF FOREIGN LOSSES OUT OF ACCUMULATION DISTRIBUTIONS FROM A FOREIGN TRUST.
(a) In general.
(b) Effect of recapture on foreign tax credit limitation under section 667(d).
(c) Recapture if taxpayer deducts foreign taxes deemed distributed.
(d) Illustrations.
Section 1.904(f)-5 SPECIAL RULES FOR RECAPTURE OF OVERALL FOREIGN LOSSES OF A DOMESTIC TRUST.
(a) In general.
(b) Recapture of trust's overall foreign loss.
(1) Trust accumulates income.
(2) Trust distributes income.
(3) Trust accumulates and distributes income.
(c) Amounts allocated to beneficiaries.
(d) Section 904(f)(3) dispositions to which section 1.904(f)-2(d)(4)(i) is applicable.
(e) Illustrations.
Section 1.904(f)-6 TRANSITIONAL RULE FOR RECAPTURE OF FORI AND GENERAL LIMITATION OVERALL FOREIGN LOSSES INCURRED IN TAXABLE YEAR BEGINNING BEFORE JANUARY 1, 1983, FROM FOREIGN SOURCE TAXABLE INCOME SUBJECT TO THE GENERAL LIMITATION IN TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 1982.
(a) General Rule.
(b) Recapture of pre-1983 FORI and general limitation overall foreign losses from post-1982 income.
(1) Recapture from income subject to the same limitation.
(2) Recapture from income subject to the other limitation.
(c) Coordination of recapture of pre-1983 and post-1982 overall foreign losses.
(d) Illustrations.
Section 1.904(f)-7 SEPARATE LIMITATION LOSS AND THE SEPARATE LIMITATION LOSS ACCOUNT.
(a) Overview of regulations.
(b) Definitions.
(1) Separate category.
(2) Separate limitation income.
(3) Separate limitation loss.
(c) Separate limitation loss account.
(d) Additions to separate limitation loss accounts.
(1) General rule.
(2) Separate limitation losses of another taxpayer.
(3) Additions to separate limitation loss account created by loss carryovers.
(e) Reductions of separate limitation loss accounts.
(1) Pre-recapture reduction for amounts allocated to other taxpayers.
(2) Reduction for offsetting loss accounts.
(3) Reduction for amounts recaptured.
(f) Effective/applicability date.
Section 1.904(f)-8 RECAPTURE OF SEPARATE LIMITATION LOSS ACCOUNTS.
(a) In general.
(b) Effect of recharacterization of separate limitation income on associated taxes.
(c) Effective/applicability date.
Section 1.904(f)-12 TRANSITION RULES.
(a) Recapture in years beginning after December 31, 1986, of overall foreign losses incurred in taxable years beginning before January 1, 1987.
(1) In general.
(2) Rule for general limitation losses.
(i) In general.
(ii) Exception.
(3) Priority of recapture of overall foreign losses incurred in pre-effective date taxable years.
(4) Examples.
(b) Treatment of overall foreign losses that are part of net operating losses incurred in pre-effective date taxable years which are carried forward to post-effective date taxable years.
(1) Rule.
(2) Example.
(c) Treatment of overall foreign losses that are part of net operating losses incurred in post-effective date taxable years which are carried back to pre-effective date taxable years.
(1) Allocation to analogous income category.
(2) Allocation to U.S. source income.
(3) Allocation to other separate limitation categories.
(4) Examples.
(d) Recapture of FORI and general limitation overall foreign losses incurred in taxable years beginning before January 1, 1983.
(e) Recapture of pre-1983 overall foreign losses determined on a combined basis.
(f) Transition rules for taxable years beginning before December 31, 1990.
(g) Recapture in years beginning after December 31, 2002, of separate limitation losses and overall foreign losses incurred in years beginning before January 1, 2003, with respect to the separate category for dividends from a noncontrolled section 902 corporation.
(1) Recapture of separate limitation loss or overall foreign loss in a separate category for dividends from a noncontrolled section 902 corporation.
(2) Recapture of separate limitation loss in another separate category.
(3) Exception.
(4) Examples.
(5) Effective/applicability date.
(h) Recapture in years beginning after December 31, 2006, of separate limitation losses and overall foreign losses incurred in years beginning before January 1, 2007.
(1) Losses related to pre-2007 separate categories for passive income, certain dividends from a DISC or former DISC, taxable income attributable to certain foreign trade income or certain distributions from a FSC or former FSC.
(i) Recapture of separate limitation loss or overall foreign loss incurred in a pre-2007 separate category for passive income, certain dividends from a DISC or former DISC, taxable income attributable to certain foreign trade income or certain distributions from a FSC or former FSC.
(ii) Recapture of separate limitation loss with respect to a pre-2007 separate category for passive income, certain dividends from a DISC or former DISC, taxable income attributable to certain foreign trade income or certain distributions from a FSC or former FSC.
(2) Losses related to pre-2007 separate categories for shipping, financial services income or general limitation income.
(i) Recapture of separate limitation loss or overall foreign loss incurred in a pre-2007 separate category for shipping income, financial services income or general limitation income.
(ii) Recapture of separate limitation loss with respect to a pre-2007 separate category for shipping income, financial services income or general limitation income.
(3) Losses related to a pre-2007 separate category for high withholding tax interest.
(i) Recapture of separate limitation loss or overall foreign loss incurred in a pre-2007 separate category for high withholding tax interest.
(ii) Recapture of separate limitation loss with respect to a pre-2007 separate category for high withholding tax interest.
(4) Elimination of certain separate limitation loss accounts.
(5) Alternative method.
(6) Effective/applicability date.
[Added by T.D. 9371, 72 FR 72592-72606, Dec. 21, 2007, as amended by T.D. 9452, 74 FR 27868-27890, June 11, 2009; T.D. 9521, 76 FR 19268-19275, Apr. 7, 2011; T.D. 9595, 77 FR 37576-37587, June 22, 2012.]
