IRS Notice 2026-17 tees up proposed regs that let taxpayers use a simpler “equity and basis pool” approach (only with the current rate election), loosen key loss suspension mechanics, and preview a future election for CFCs to generally opt out of §987(3) gain or loss, with guardrails for inbound transactions.
Notice 2026-17
IRS and Treasury announced intent to issue proposed regulations under §987 that (1) allow an elective equity and basis pool method broadly resembling the 1991 framework but with an annual remittance calculation, (2) narrow and simplify loss suspension and recognition grouping rules and expand hedging flexibility, and (3) preview a future elective regime under which CFCs generally would not compute or recognize §987(3) gain or loss except for certain inbound transactions.
Why It Matters
Compliance relief is real, not cosmetic. The elective equity and basis pool method replaces the 2024 final regs’ heavier annual machinery with a more familiar pool approach and eliminate…
