Reg. § 1.987-15 Applicability date.
(a) Applicability date of the section 987 regulations
(1) In general Except as provided in this section, the section regulations apply to taxable years beginning after December 31, 2024.
(2) Applicability date for a terminating QBU The section regulations apply to the owner of a terminating QBU immediately before the section QBU terminates, but only with respect to the section QBU, any successor deferral QBUs or successor suspended loss QBUs (in their capacity as such), and any net unrecognized section gain or loss, deferred section gain or loss, or suspended section loss with respect thereto. See for the definition of a terminating QBU.
(b) Application of the section 987 regulations to taxable years beginning on or before December 31, 2024, and ending after November 9, 2023 A taxpayer (including a taxpayer that has applied the 2016 and 2019 section regulations to a prior taxable year under of this section) may choose to apply the section regulations to a taxable year beginning on or before December 31, 2024, and ending after November 9, 2023, provided the taxpayer and each member of its consolidated group and section electing group:
(1) Consistently apply the section regulations in their entirety to the taxable year and all subsequent taxable years beginning on or before December 31, 2024; and
(2) Apply the section regulations on their original timely filed (including extensions) returns for the first taxable year to which the taxpayer chooses to apply the section regulations.
(c) Application of the 2016 and 2019 section 987 regulations
(1) In general A taxpayer may choose to apply the 2016 and 2019 section regulations to a taxable year beginning after December 7, 2016, and beginning on or before December 31, 2024, provided the taxpayer and each member of its consolidated group and section electing group:
(i) First apply the 2016 and 2019 section regulations to a taxable year ending before November 9, 2023;
(ii) Consistently apply the 2016 and 2019 section regulations in their entirety to all section QBUs (within the meaning of prior ) directly or indirectly owned (within the meaning of prior ) by the taxpayer and each member of its consolidated group and section electing group on the transition date for that taxable year and all subsequent taxable years before the taxable year in which the taxpayer and each member of its consolidated group and section electing group apply the section regulations pursuant to or of this section; and
(iii) Either—
(A) First applied the 2016 and 2019 section regulations on their returns filed before November 9, 2023; or
(B) First apply the 2016 and 2019 section regulations on their returns filed on or after November 9, 2023 and apply in lieu of prior .
(2) Application to section 987 QBUs not owned on the transition date For any taxable year in which a taxpayer applies the 2016 and 2019 section regulations pursuant to of this section, the taxpayer may choose to apply the 2016 and 2019 section regulations to any section QBU (within the meaning of prior ) that the taxpayer did not directly or indirectly own (within the meaning of prior ) on the transition date, provided the taxpayer applies the 2016 and 2019 section regulations consistently to that QBU for that taxable year and all subsequent taxable years before the taxable year in which the taxpayer applies the section regulations pursuant to or of this section and the taxpayer either—
(i) First applied the 2016 and 2019 section regulations to the section QBU on its return filed before November 9, 2023; or
(ii) First applies the 2016 and 2019 section regulations to the section QBU on its return filed on or after November 9, 2023, and applies in lieu of prior .
(3) Modifications of defined terms for purposes of this paragraph (c) Solely for purposes of this —
(i) Application of § 1.987-10 in lieu of prior § 1.987-10 For any taxpayer to which or of this section applies, the term 2016 and 2019 section regulations includes and not prior .
(ii) Partnerships not included in section 987 electing group The term section electing group does not include foreign partnerships.
(iii) Transition date The term transition date has the meaning provided in prior .
(d) Prior § 1.987-12 For the applicability dates of prior , see prior . Prior applies through the end of the taxable year immediately preceding the first taxable year in which a taxpayer applies pursuant to or of this section.
[T.D. 10016, 89 FR 100165, Dec. 11, 2024]