About the Course
Introduction
This CLE/CPE webinar will provide attorneys and tax professionals guidance on IRC Section 987: The 2004 final regulations, and more recent IRS guidance for taxpayers. The panel will discuss the application of Section 987 to foreign branches and controlled foreign corporations (CFCs), options, and tax planning considerations.
Description
The IRS final regulations for foreign currency reporting include provisions that significantly impact companies with foreign operations. Section 987 introduces updated foreign currency reporting requirements effective for the 2025 tax year onward. Tax counsel must have a complete understanding of these rules and recent IRS guidance to assist taxpayers in evaluating the various elections and maintaining compliance.
Section 987 covers how taxpayers with qualified business units (QBUs) operating overseas calculate taxable income and foreign currency gains or losses. Taxpayers have struggled with the application of Sec. 987 and methods of calculating income stemming from overseas operations, prompting the release of IRS Notice 2026-17 and proposed Section 987 regulations, which provide guidance to ease the complexity of these rules.
IRS Notice 2026-17 includes an option to elect to use an earnings and basis pool method for calculating Section 987 gains and losses and the 2026 proposed Section 987 regulations provide an exemption election for CFCs. Tax counsel and businesses with foreign operations must evaluate elections and exemptions under the new rules, and understand the impact of Sec. 987 on international tax planning.
Listen as our panel discusses Section 987 reporting requirements, recent developments, the pros and cons of new elections and exemptions, and offers tax planning guidance for taxpayers with foreign business operations.
Presented By
Mr. Chestnut is a Managing Director in BDO’s Washington National Tax office and serves as the Capital Markets Practice Leader. He works with BDO's U.S. offices in helping clients maximize the use of financial products and overall treasury management from a tax perspective. Mr. Chestnut has more than 30 years of experience in international tax and financial products. He has experience in many areas of capital markets transaction taxation including foreign currency transactions from both U.S. and subpart F perspectives, DASTM, foreign currency hedging, interest rate hedging, cash pooling, and treasury centers. Mr. Chestnut also has experience assisting clients in the area of commodity trading, dealing and hedging.
Mr. Harper is a Director at KBF Advisory with more than 30 years of experience advising clients on international tax planning and cross-border transactions. He specializes in helping multinational businesses, investment funds, and real estate investors navigate complex global tax issues while developing tax-efficient transaction structures. Mr. Harper's practice focuses on inbound and outbound investment planning, international mergers and acquisitions, treaty planning, cross-border real estate transactions, foreign currency matters, Subpart F, GILTI, PFIC, and other U.S. international tax rules. He works with a diverse client base that includes technology companies, hedge funds, REITs, strategic investors, and high-net-worth individuals.
Ms. Valestin is a Partner, International Tax Services at PwC US.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Tuesday, October 27, 2026
- schedule
1:00 PM ET/10:00 AM PT
I. What Section 987 is and who must transition to the final regulations
II. Transition
III. The 2024 Final Regulations: FEEP, CR and AR
IV. IRS Notice 2026-17 and the EBPM
V. The 2026 Proposed Regulations: CFC Exemption Election
VI. Elections & Examples
VII. Hedging
VIII. Critical Data for Assessment
IX. Forms
The panel will review these and other key issues:
- Impact of 2024 final regulations
- Application and mechanics of IRC Section 987 for foreign business operations, branches, and other QBUs
- New equity and basis pool election and related simplification provisions
- Comparing calculation methods under the final regulations and proposed alternatives under IRS Notice 2026-17
- Assessment of options and elections and how they impact hedging
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