Instructions For Form 926 (Rev. December 2017) I926

User Manual: 926

Open the PDF directly: View PDF .
Page Count: 7

Download
Open PDF In Browser	View PDF

Instructions for Form 926

Department of the Treasury
Internal Revenue Service

(Rev. December 2017)

Return by a U.S. Transferor of Property to a Foreign Corporation
Section references are to the Internal Revenue
Code unless otherwise noted.

What's New
The regulations addressing the active
trade or business (ATB) exception and
the transfer of intangible property under
section 367(a), 367(d), and 6038B have
been finalized and are generally
effective for transfers occurring on or
after September 14, 2015. See Part III,
Information Regarding Transfer of
Property, later.
For transfers after December
31, 2017, P.L. 115-97, section
CAUTION 14102 modifies the rules
pertaining to transfers of loss amounts
from foreign branches to certain foreign
corporations and repeals the active
trade or business exception. If a revised
Form 926 is unavailable at the time a
taxpayer is required to file Form 926 for
such transfers, see IRS.gov/Form926
for instructions for filing the December
2017 Form 926 for these transfers.

!

General Instructions
Future Developments

For the latest information about
developments related to Form 926 and
its instructions, such as legislation
enacted after they were published, go to
IRS.gov/Form926.

Purpose of Form

Use Form 926 to report certain transfers
of tangible or intangible property to a
foreign corporation required by section
6038B.

Who Must File

Generally, a U.S. citizen or resident, a
domestic corporation, or a domestic
estate or trust must complete and file
Form 926 to report certain transfers of
property to a foreign corporation that are
described in section 6038B(a)(1)(A),
367(d), or 367(e). See section 6038B,
and Regulations sections 1.6038B-1
and 1.6038B-1T for more information.

Special Rules

Transfers by a partnership. If the
transferor is a partnership (domestic or
foreign), the domestic partners of the
Jan 22, 2018

partnership, not the partnership itself,
are required to comply with section
6038B and file Form 926. Each
domestic partner is treated as a
transferor of its proportionate share of
the property. See the instructions for
line 2 for additional information.
Transfers by spouses. Spouses
may file Form 926 jointly, but only if they
file a joint income tax return.
Transfers of cash. A U.S. person
that transfers cash to a foreign
corporation must report the transfer on
Form 926 if (a) immediately after the
transfer, the person holds directly or
indirectly, at least 10% of the total voting
power or the total value of the foreign
corporation, or (b) the amount of cash
transferred by the person to the foreign
corporation during the 12-month period
ending on the date of the transfer
exceeds $100,000. See Regulations
section 1.6038B-1(b)(3).
Transfers of stock or securities for
which a gain recognition agreement
(GRA) is filed. A U.S. transferor must
file a Form 926 with respect to a transfer
of stock or securities in all cases in
which a GRA is filed under Regulations
section 1.367(a)-8. Provided that the
initial GRA is timely filed (determined
without regard to Regulations section
1.367(a)-8(p)), then, with respect to the
transfer of the stock or securities, the
U.S. transferor should (1) complete Part
I and Part II of the Form 926, (2)
complete columns (a) through (e) of the
"Stock and securities" line in Part III,
Section A, of the form, and check the
“Yes” box on line 10, and (3) complete
the Supplemental Part III Information
Required To Be Reported section at the
end of Part III of the form using the
Line 10 instructions under the
Supplemental Part III Information
Required To Be Reported section, later.
In addition, the U.S. transferor must
comply in all material respects with the
terms of a GRA (determined without
regard to Regulations section
1.367(a)-8(p)) in order to satisfy its
section 6038B reporting obligations.
See Regulations section 1.6038B-1 for
further information.
Distributions by domestic
liquidating corporations. A domestic
liquidating corporation must file a Form
926 with respect to a distribution of
property in complete liquidation under
Cat. No. 27037X

section 332 to a foreign distributee
corporation that meets the stock
ownership requirements of section
332(b). If the distribution qualifies for the
exception in Regulations section
1.367(e)-2(b)(2)(i) or (iii) then, provided
that all initial liquidation documents are
timely filed (determined without regard
to Regulations section 1.367(e)-2(f)),
the domestic liquidating corporation
should (1) complete Part I and Part II of
the Form 926, (2) in the Supplemental
Information Required To Be Reported
section at the end of Part III of the form,
note that the information required by
Form 926 is contained in the statement
required by Regulations section
1.367(e)-2(b)(2)(i)(C)(2) or (iii)(D), as
the case may be, and (3) complete Part
IV. In addition, the domestic liquidating
corporation must comply in all material
respects with the terms of a liquidation
document (determined without regard to
Regulations section 1.367(e)-2(f)) in
order to satisfy its section 6038B
reporting obligations. See Regulations
section 1.6038B-1 for further
information.

Exceptions to Filing
1. For exchanges described in
section 354 or 356, a U.S. person does
not have to file Form 926 if:
a. The U.S. person exchanges
stock of a foreign corporation in a
recapitalization described in section
368(a)(1)(E), or
b. The U.S. person exchanges
stock of a domestic or foreign
corporation for stock of a foreign
corporation under an asset
reorganization described in section
368(a)(1) that is not treated as an
indirect stock transfer under
Regulations section 1.367(a)-3(d).
2. Generally, a domestic corporation
that distributes stock or securities of a
domestic corporation under section 355
is not required to file Form 926.
However, this exception does not apply
if the distribution is of stock or securities
of a foreign controlled corporation to a
distributee shareholder who is not a
U.S. citizen or resident or a domestic
corporation.
3. A U.S. person that transfers stock
or securities under section 367(a) does

not have to file Form 926 if either a or b
below applies.
a. The U.S. transferor owned less
than 5% of both the total voting power
and the total value of the transferee
foreign corporation immediately after
the transfer and:
The U.S. transferor qualified for
nonrecognition treatment with respect to
the transfer, or
The U.S. transferor is a tax-exempt
entity and the income was not unrelated
business income, or
The transfer was taxable to the U.S.
transferor under Regulations section
1.367(a)-3(c) and such person properly
reported the income from the transferor
on its timely filed return (including
extensions) for the tax year that
includes the date of transfer, or
The transfer is considered to be to a
foreign corporation solely by reason of
Regulations section 1.83-6(d)(1) and
the fair market value of the property
transferred did not exceed $100,000.
b. The U.S. transferor owned 5% or
more of the total voting power or the
total value of the transferee foreign
corporation immediately after the
transfer and:
The U.S. transferor is a tax-exempt
entity and the income was not unrelated
business income, or
The transfer was taxable to the U.S.
transferor and such person properly
reported the income from the transfer on
its timely filed return, or
The transfer is considered to be to a
foreign corporation solely by reason of
Regulations section 1.83-6(d)(1) and
the fair market value of the property
transferred did not exceed $100,000.

When and How To File

Form 926 must be filed with the U.S.
transferor's income tax return (or, if
applicable, exempt organization return)
for the tax year that includes the date of
the transfer.
The Form 926 filed with the IRS
must include the additional
CAUTION information required in
Regulations sections 1.6038B-1(c)
through (e) and Temporary Regulations
sections 1.6038B-1T(c) and (d).

!

Other Forms That May Be
Required

Persons filing this form may be required
to file FinCEN Form 114, Report of
Foreign Bank and Financial Accounts
(FBAR).
A U.S. transferor that is required to
enter into a GRA under section 367 to

qualify for nonrecognition treatment
must file Form 8838, Consent To
Extend the Time To Assess Tax Under
Section 367—Gain Recognition
Agreement, to extend the statute of
limitations with respect to the gain
realized but not recognized on the
transfer.

Penalties for Failure To File

If a taxpayer fails to comply with section
6038B, the penalty equals 10% of the
fair market value of the property at the
time of the transfer. The penalty will not
apply if the failure to comply is due to
reasonable cause and not to willful
neglect. The penalty is limited to
$100,000 unless the failure to comply
was due to intentional disregard.
Moreover, the period of limitations for
assessment of tax upon the transfer of
that property is extended to the date
that is 3 years after the date on which
the information required to be reported
is provided.

Section 6662(j) Penalty

For tax years beginning after March 18,
2010, a 40% penalty may be imposed
on any underpayment resulting from an
undisclosed foreign financial asset
understatement. No penalty will be
imposed with respect to any portion of
an underpayment if the taxpayer can
demonstrate that the failure to comply
was due to reasonable cause with
respect to such portion of the
underpayment and the taxpayer acted
in good faith with respect to such portion
of the underpayment. See sections
6662(j) and 6664(c) for additional
information.

Specific Instructions
Important: All information reported on
Form 926 must be in English. All
amounts must be stated in U.S. dollars.
If the information required in a given
section exceeds the space provided
within that section, do not write “see
attached” in the section and then attach
all of the information on additional
sheets. Instead, complete all entry
spaces in the section and attach the
remaining information on additional
sheets. The additional sheets must
conform with the IRS version of that
section.

Part I—U.S. Transferor
Information
Identifying number. The identifying
number of an individual is his or her
social security number (SSN). The
-2-

identifying number of all others is their
employer identification number (EIN).
Line 1a. If you answered “Yes” to
question 1a and the asset is a tangible
asset, section 367(a)(5) may require
basis adjustments. If you answered “No”
to question 1a and the asset is a
tangible asset, the transfer is taxable
under sections 367(a)(1) and (a)(5). If
the asset transferred is an intangible
asset, see section 367(d) and its
regulations.
If you answered “No” to question 1a:
If the U.S. transferor is owned directly
by more than five domestic corporations
immediately before the reorganization,
but some combination of five or fewer
domestic corporations controls the U.S.
transferor, the U.S. transferor must
designate the five or fewer domestic
corporations that comprise the control
group. List these designated
corporations on Form 926, line 1b.
Line 1b. If the transferor went out of
existence pursuant to the transfer (for
example, as in a reorganization
described in section 368(a)(1)(C)), list
the controlling shareholders and their
identifying numbers.
Line 1c. If the transferor was a member
of an affiliated group filing a
consolidated tax return (see sections
1501 through 1504), but was not the
parent corporation, list the name and
EIN of the parent corporation and file
Form 926 with the parent corporation's
consolidated return.
Line 1d. If the answer to line 1d is
"Yes," and if the asset is transferred in
an exchange described in section
361(a) or (b), attach the following.
A statement that the conditions set
forth in the second sentence of section
367(a)(5) and any regulations under that
section have been satisfied.
An explanation of any basis or other
adjustments made pursuant to section
367(a)(5) and any regulations
thereunder.
Line 2. If a partnership (whether foreign
or domestic) transfers property to a
foreign corporation in an exchange
described in section 367(a)(1), then a
U.S. person that is a partner in the
partnership shall be treated as having
transferred a proportionate share of the
property in an exchange described in
section 367(a)(1). A U.S. person's
proportionate share of partnership
property shall be determined under the
rules and principles of sections 701
through 761 and the regulations
thereunder. See Temporary Regulations
section 1.367(a)-1T(c)(3).
Instructions for Form 926 (Rev. 12-2017)

Line 2d. For definition of “regularly
traded on an established securities
market,” see Temporary Regulations
section 1.367(a)-1T(c)(3)(ii)(D). If the
answer to line 2d is “Yes,” the rules of
Temporary Regulations section
1.367(a)-1T(c)(3)(ii)(C) apply.

Part II—Transferee
Foreign Corporation
Information
Line 4b, Reference ID number. A
reference ID number is required on
line 4b only in cases where no EIN was
entered on line 4a for the transferee
foreign corporation. However, filers are
permitted to enter both an EIN and a
reference ID number. If applicable, enter
on line 4b the reference ID number
(defined below) you have assigned to
the transferee foreign corporation.
A “reference ID number” is a number
established by or on behalf of the U.S.
transferor identified at the top of page 1
of the form that is assigned to the
transferee foreign corporation with
respect to which Form 926 reporting is
required. These numbers are used to
uniquely identify the transferee foreign
corporation in order to keep track of the
entity from tax year to tax year. The
reference ID number must meet the
requirements set forth below.
Note. Because reference ID numbers
are established by or on behalf of the
U.S. person filing Form 926, there is no
need to apply to the IRS to request a
reference ID number or for permission
to use these numbers.
Note. In general, the reference ID
number assigned to a transferee foreign
corporation on Form 926 has relevance
only to Form 926 and should not be
used with respect to the transferee
foreign corporation on other IRS forms.
Requirements. The reference ID
number must be alphanumeric (defined
below) and no special characters or
spaces are permitted. The length of a
given reference ID number is limited to
50 characters.
For these purposes, the term
“alphanumeric” means the entry can be
alphabetical, numeric, or any
combination of the two.
The same reference ID number must
be used consistently from tax year to tax
year with respect to a given transferee
foreign corporation. If for any reason a
reference ID number falls out of use (for
example, the transferee foreign
corporation no longer exists due to
Instructions for Form 926 (Rev. 12-2017)

disposition or liquidation), the reference
ID number used for that transferee
foreign corporation cannot be used
again for another transferee foreign
corporation for purposes of Form 926
reporting.
There are some situations that
warrant correlation of a new reference
ID number with a previous reference ID
number when assigning a new
reference ID number to a transferee
foreign corporation. For example:
In the case of a merger or acquisition,
a Form 926 filer must use a reference ID
number which correlates the previous
reference ID number with the new
reference ID number assigned to the
transferee foreign corporation.
In the case of an entity classification
election that is made on behalf of a
transferee foreign corporation on Form
8832, Regulations section
301.6109-1(b)(2)(v) requires the
transferee foreign corporation to have
an EIN for this election. For the first year
that Form 926 is filed after an entity
classification election is made on behalf
of the transferee foreign corporation on
Form 8832, the new EIN must be
entered on line 4a and the old reference
ID number must be entered on line 4b.
In subsequent years, the Form 926 filer
may continue to enter both the EIN and
the reference ID number, but must enter
at least the EIN on line 4a.
You must correlate the reference ID
numbers as follows: New reference ID
number [space] Old reference ID
number. If there is more than one old
reference ID number, you must enter a
space between each such number. As
indicated above, the length of a given
reference ID number is limited to 50
characters and each number must be
alphanumeric and no special characters
are permitted.
Note. This correlation requirement
applies only to the first year the new
reference ID number is used.
Line 5, Address. Enter the information
in the following order: city, province or
state, and country. Follow the country's
practice for entering the postal code, if
any. Do not abbreviate the country
name; however, if you file electronically,
please follow the convention specified.
Line 6. Enter the two-letter country
code (from the list at IRS.gov/
countrycodes) of the transferee foreign
corporation's country of incorporation or
organization.
Line 7. List the entity classification (for
example, partnership, corporation, etc.)
of the transferee foreign corporation
-3-

under the laws of the country of
incorporation or organization.
Line 8. See section 957(a) to
determine whether the corporation is a
controlled foreign corporation
immediately after the transfer.

Part III—Information
Regarding Transfer of
Property

Information in Part III is reported in four
sections. Collectively, the four sections
capture information with regard to all of
the properties transferred. The
properties covered by each section,
respectively, are:
Cash, stock, and securities
(“Section A”).
Property qualifying for Active Trade or
Business exception under Regulations
sections 1.367(a)-2(a)(2)(i) and (ii)
(“Section B”).
Property not qualifying for Active
Trade or Business exception (other than
intangible property subject to section
367(d)) (“Section C”).
Intangible property under Regulations
section 1.367(a)-1(d)(5) (“Section D”).
For information that must generally
be included for a transfer described in
section 6038B(a)(1)(A), see the
beginning of the Supplemental Part III
Information Required To Be Reported
section, later.
If additional row(s) are needed to
enter information for a property category
in a Section in Part III, provide the
information in the same format as
required for the row in the Section at
issue in the Supplemental Part III
Information Required To Be Reported
section. For each property category with
such additional row(s), in the Section
enter “See Supplemental” under column
(b), Description of Property, on the last
row of the property category and enter
in the remaining columns on that last
row the aggregated amounts from the
corresponding columns on the
additional rows.
For distributions covered by section
367(e)(2), see the instructions for
line 21a, later.

Section A

Section A captures information
regarding cash and certain stock and
securities transferred.
Column (a), Date of transfer. Enter
the first date on which title to,
possession of, or rights to the use of the
property passed for U.S. income tax
purposes. See Temporary Regulations

section 1.6038B-1T(b)(4) for additional
information.

general rule of section 367(a)(1) will
apply.

Column (b), Description of property.
For each stock or security, provide the
class or type and the name of the
issuing corporation. See the Line 10
instructions in the Supplemental Part III
Information Required To Be Reported
section, later, for additional reporting
requirements.

Column (a), Date of transfer. Enter
the first date on which title to,
possession of, or rights to the use of the
property passed for U.S. income tax
purposes. See Temporary Regulations
section 1.6038B-1T(b)(4) for additional
information.

Column (c), Fair market value on
date of transfer. Enter the fair market
value of the property transferred
(measured as of the date of transfer).
Column (d), Cost or other basis.
Enter the adjusted basis in the property
transferred on the date of the transfer.
See sections 1011 through 1016 for
more information for the determination
of adjusted basis.
Column (e), Gain recognized on
transfer. Enter the gain recognized on
the transfer of each property.
Note. Do not report in Section A any
information for stock or securities
transferred that are described in
Regulations sections 1.367(a)-2(a)(2)(i)
and (ii). Instead, report the information
for such stock or securities in Section B.
Line 9. If cash was the only property
transferred, skip the remainder of Part III
and proceed to Part IV.
Line 10. Indicate whether a gain
recognition agreement was filed
pursuant to Regulations section
1.367(a)-8 for a transfer of stock or
securities. If “Yes,” complete the
Supplemental Part III Information
Required To Be Reported section at the
end of Part III of the form using the
Line 10 instructions under the
Supplemental Part III Information
Required To Be Reported section, later.

Section B

Section B captures information
regarding property that is eligible
property under Regulations section
1.367(a)-2(a)(2)(i) that is transferred for
use by the foreign corporation in the
active conduct of a trade or business
outside of the United States under
Regulations section 1.367(a)-2(a)(2)(ii).
Generally, if the property is used in the
active conduct of a foreign trade or
business under Regulations sections
1.367(a)-2(d) through (h), and the U.S.
transferor complies with the reporting
requirements of section 6038B and its
regulations for the transfer of such
property, the active trade or business
exception (at section 367(a)(3)) to the

Column (b), Description of property.
Provide a description of the property
transferred. See Regulations section
1.6038B-1(c)(4)(i) for identifying and
describing items of property within a
particular property category in
Section B.
Column (c), Fair market value on
date of transfer. Enter the fair market
value of the property transferred
(measured as of the date of transfer).
Column (d), Cost or other basis.
Enter the adjusted basis in the property
transferred on the date of the transfer.
See sections 1011 through 1016 for
more information for the determination
of adjusted basis.
Column (e), Gain recognized on
transfer. Enter the gain recognized on
the transfer of each property. Include in
this column any recapture of
depreciation under Regulations section
1.367(a)-4. If the transferor transferred
property of a foreign branch with
previously deducted losses, such losses
generally must be recaptured by the
recognition of gain realized on the
transfer, regardless of whether any of
the property of the foreign branch
satisfies the active trade or business
exception. See Regulations sections
1.367(a)-6 and -6T.
Important. Do not enter any such
foreign branch loss recapture in
Section B. See the instructions for
line 12c below for information on how to
report foreign branch loss recapture.
Note. Only report information under the
property category “Tangible Property
(not listed under another category)” with
respect to tangible property for which
information is not reportable under
another property category of Section B.

Section C

Section C captures information with
respect to property to which the active
trade or business exception does not
apply (other than intangible property
subject to section 367(d)). Section
367(a)(1) applies to the transfer of
property reported in Section C.

-4-

Column (a), Date of transfer. Enter
the first date on which title to,
possession of, or rights to the use of the
property passed for U.S. income tax
purposes. See Temporary Regulations
section 1.6038B-1T(b)(4) for additional
information.
Column (b), Description of property.
Provide a description of the property
transferred. See, in general, final and
temporary Regulations section
1.6038B-1(c)(4).
Column (c), Fair market value on
date of transfer. Enter the fair market
value of the property transferred
(measured as of the date of transfer).
Column (d), Cost or other basis.
Enter your adjusted basis in the
property transferred on the date of the
transfer. See sections 1011 through
1016 for more information for the
determination of adjusted basis.
Column (e), Gain recognized on
transfer. Enter the gain recognized
under section 367 and its regulations on
the transfer of each property. Include in
this column any recapture of
depreciation under Regulations section
1.367(a)-4. If the transferor transferred
property of a foreign branch with
previously deducted losses, such losses
generally must be recaptured by the
recognition of gain realized on the
transfer. See Regulations sections
1.367(a)-6 and -6T.
Important. Do not enter any such
foreign branch loss recapture amount in
Section C. See the instructions for
line 12c below for information on how to
report foreign branch loss recapture.
Certain property to be retransferred
(see Regulations section
1.367(a)-2(g)). This property category
is for property to which Regulations
sections 1.367(a)-2(g)(1)(i) and (ii)
apply, taking into account Regulations
section 1.367(a)-2(g)(2).
Property described in Regulations
section 1.6038B-1(c)(4)(iv). This
category captures information regarding
property that is eligible property under
Regulations section 1.367(a)-2(b) taking
into account the application of
Regulations section 1.367(a)-2(c)
(certain property that does not
constitute eligible property) that was
transferred to the foreign corporation
but not for use in the active conduct of a
trade or business outside the United
States. Do not report in this category
information regarding property which
would be reported under the category
“Certain property to be retransferred
Instructions for Form 926 (Rev. 12-2017)

(see Regulations section
1.367(a)-2(g)).”

column (e), and Part III, Section C,
column (e).

Part III Information Required To Be
Reported section.

Property described in Regulations
section 1.6038B-1(c)(4)(vii). This
category includes any property (a) other
than property described in Regulations
section 1.367(a)-2(c); (b) that cannot
qualify under Regulations section
1.367(a)-2(a)(2) regardless of its use in
the active conduct of a trade or
business outside of the United States;
and (c) that is not subject to the rules of
section 367(d) under Regulations
section 1.367(a)-1(b)(5) (treatment of
certain property as subject to section
367(d)). Each item of property must be
separately identified. This category
would include, for example, information
regarding:
property described in section 1221(a)
(3),
a working interest in oil and gas not
reported in Section B, and
property for which the transferor
could have applied section 367(d)
pursuant to Regulations section
1.367(a)-1(b)(5) but did not.

Section D

Column (e), Cost or other basis.
Enter the adjusted basis in the property
transferred on the date of the transfer.
See sections 1011 through 1016 for
more information for the determination
of adjusted basis.

Note. Do not report in Section C any
information for stock or securities
transferred. Instead, report this
information in Section A or Section B.
Note. Do not report in Section C any
information for intangible property
subject to section 367(d). Instead,
report this information in Section D.
Line 11. If the answer to the question
on line 11 is "Yes," complete the
Supplemental Part III Information
Required To Be Reported section at the
end of Part III of the form using the
Line 11 instructions under the
Supplemental Part III Information
Required To Be Reported section, later.
Lines 12a-e. See Final and Temporary
Regulations sections 1.367(a)-2 through
1.367(a)-7 for instances in which a
transferor must recognize income on the
transfer of property. If the answer to
line 12b, 12c, or 12e is “Yes,” complete
the Supplemental Part III Information
Required To Be Reported section at the
end of Part III of the form using the
Line 12b, 12c, or 12e instructions under
the Supplemental Part III Information
Required To Be Reported section, later.
Line 12c. If the answer to line 12c is
“Yes,” enter on line 12d the total amount
of the foreign branch loss recapture
under Regulations sections 1.367(a)-6
and -6T. Do not enter this amount in any
Section of Part III of the form. See the
instructions for Part III, Section B,
Instructions for Form 926 (Rev. 12-2017)

Section D captures information
regarding transfers of intangible
property as defined under Regulations
section 1.367(a)-1(d)(5) and subject to
section 367(d). Therefore, the category
“Property described in section 936(h)(3)
(B)” does not include property described
in section 1221(a)(3) or a working
interest in oil and gas property.
Column (a), Date of transfer. Enter
the first date on which title to,
possession of, or rights to the use of the
property passed for U.S. income tax
purposes. See Temporary Regulations
section 1.6038B-1T(b)(4) for additional
information.
Column (b), Description of property.
Provide a separate description for each
identified intangible, including each
identified (i) patent, invention, formula,
process, design, pattern, or know-how;
(ii) copyright, literary, musical, or artistic
composition; (iii) trademark, trade
name, or brand name; (iv) franchise,
license, or contract; and (v) method,
program, system, procedure, campaign,
survey, study, forecast, estimate,
customer list, or technical data. If an
identified intangible is similar to any of
the intangibles described in the
preceding sentence (either individually
or collectively), provide a brief
explanation.
Column (c), Useful life. Enter the
useful life for each intangible. The useful
life of intangible property is defined
under Regulations section 1.367(d)-1(c)
(3)(i). If the useful life of intangible
property is indefinite, enter “indefinite.”
Regulations section 1.367(d)-1(c)(3)(ii)
is not relevant to the determination of
the useful life entered in column (c).
Column (d), Arm’s length price on
date of transfer. Generally, if a U.S.
person transfers intangible property
subject to section 367(d), such person
shall, over the useful life of the property,
annually include in gross income an
amount that represents an appropriate
arm’s length charge for use of the
property. The appropriate charge is
determined in accordance with the
provisions of section 482 and
regulations thereunder. See Temporary
Regulations section 1.367(d)-1T(c)(1).
For each intangible reported in
Section D, provide the arm’s length
price on the date of transfer. See
instructions below for information that
must be included in the Supplemental
-5-

Column (f), Income inclusion for
year of transfer. A U.S. person who
transfers property subject to section
367(d) is treated as having sold such
property in exchange for payments
which are contingent upon the
productivity, use or disposition of such
property and receiving amounts
annually over the useful life of the
property that represent an appropriate
arm’s length charge for use of the
property. For each intangible
transferred, enter the amount included
in income under section 367(d) on the
income tax return for the year of the
transfer. If the amount reported in
column (d) as the arm’s length price for
intangible property is an allocation of an
amount determined based on an
aggregate analysis, enter the inclusion
amount in column (f) that corresponds
to the allocated amount reported in
column (d). If no amount is so included,
enter “0.” The amount entered in column
(f) should reflect the application of
Regulations section 1.367(d)-1(c)(3)(ii),
if properly chosen. See line 15c and
related instructions, below. See also the
Line 15c instructions under the
Supplemental Part III Information
Required To Be Reported section, later,
for additional information that must be
reported.
Line 13a. For purposes of answering
line 13a, “property described in section
936(h)(3)(B)” does not include property
described in section 1221(a)(3) or a
working interest in oil and gas property.
See Regulations section 1.367(a)-1(d)
(5).
Line 13b. If the amount requested on
line 13b is zero, enter “0.” The amount
entered on line 13b should reflect the
application of Regulations section
1.367(d)-1(c)(3)(ii), if properly chosen.
See line 15c and related instructions.
Include in the amount entered on
line 13b gain recognized as a result of
making an election to treat a transfer of
certain intangible property as a sale
under Temporary Regulations section
1.367(d)-1T(g)(2). See also the
Line 13b instructions under the
Supplemental Part III Information
Required To Be Reported section, later,

for additional information that must be
reported.
Line 14a. Under Regulations section
1.367(a)-1(b)(5), a U.S. transferor may
apply section 367(d) to certain property
that otherwise would be subject to
section 367(a).
Line 14b. If the amount requested on
line 14b is zero, enter “0.” The amount
entered on line 14b should reflect the
application of Regulations section
1.367(d)-1(c)(3)(ii), if properly chosen. If
the answer to line 14b is “Yes,” see the
Line 14b instructions under the
Supplemental Part III Information
Required To Be Reported section, later,
for additional information that must be
reported.
Line 14d. If the amount requested on
line 14d is zero, enter “0.” See the
Line 14d instructions under the
Supplemental Part III Information
Required To Be Reported section, later,
for additional information that must be
reported.
Line 15c. In cases where the useful life
of the transferred intangible property is
indefinite or reasonably anticipated to
exceed 20 years, a taxpayer may,
instead of including amounts in income
during the entire useful life of the
intangible property, choose in the year
of transfer to increase annual inclusions
during the 20-year period beginning with
the first year in which the U.S. transferor
takes into account income pursuant to
section 367(d), to reflect amounts that,
but for the choice to increase annual
inclusions, would have been required to
be included following the end of the
20-year period. To apply this 20-year
inclusion period, a taxpayer must attach
a statement titled “Application of the
20-year Inclusion Period to Section
367(d) Transfer” to a timely filed original
federal income tax return (including
extensions) for the year of the transfer.
See Regulations section 1.367(d)-1(c)
(3)(ii). If the answer to line 15c is “Yes,”
see the Line 15c and Line 15d
instructions below for information that
must be included in the Supplemental
Part III Information Required To Be
Reported section at the end of Part III of
the form.

Supplemental Part III
Information Required To Be
Reported
Information to be generally reported
for a transfer described in section
6038B(a)(1)(A): Provide a general
description of the transfer, and any
wider transaction of which it forms a

part, including a chronology of the
transfers involved and an identification
of the other parties to the transaction to
the extent known. See Temporary
Regulations section 1.6038B-1T(c)(2)
(ii).
Provide a description of the
consideration received by the U.S.
person making the transfer. The
description should identify:
The property comprising the
consideration and the total fair market
value of the items, and
In the case of stock or securities, the
class, type, amount, and characteristics
of the interest received.
See Temporary Regulations sections
1.6038B-1T(c)(3) and 1.6038B-1T(d)(1)
(iii).
Information to be reported. When
providing any information in the
Supplemental Part III Information
Required To Be Reported section,
indicate the Section, column, row, and
line for which the information is being
provided.
Additional Section rows. If additional
rows are needed to enter information for
a property category on a Section in Part
III, provide the information in the same
format as required for the row on the
Section at issue in the Supplemental
Part III Information Required To Be
Reported section. See the beginning of
the Part III instructions, earlier, for how
to incorporate the information from the
additional rows.
Line 10. If the answer to the line 10
question is “Yes,” for any stock or
securities transferred, provide a general
description of the corporation issuing
the stock or securities. See Regulations
section 1.6038B-1(c)(4)(ii).

2. The number of months the
property was in use;
3. The fair market value of the
property;
4. A schedule of the depreciation
deduction with respect to the property;
and
5. A calculation of the amount of
depreciation to be recaptured.
See Regulations section
1.6038B-1(c)(4)(iii).
Line 12c. If the answer to line 12c is
“Yes”:
Describe the foreign branch the
property of which is transferred. See
Temporary Regulations section
1.6038B-1T(c)(5)(i).
Describe the property of the foreign
branch, including its adjusted basis and
fair market value. See Temporary
Regulations section 1.6038B-1T(c)(5)
(ii).
Set forth a detailed calculation of the
sum of the losses incurred by the
foreign branch before the transfer and a
detailed calculation of any reduction of
such losses. See Temporary
Regulations section 1.6038B-1T(c)(5)
(iii).
Set forth a statement of the character
of the gain required to be recognized.
See Temporary Regulations section
1.6038B-1T(c)(5)(iv).
List any intangible property subject to
section 367(d) the transfer of which
gives rise to foreign branch recapture
under Regulations sections 1.367(a)-6
and -6T and provide a calculation of the
gain required to be recognized. See
Regulations section 1.6038B-1(d)(1)
(vii).

Line 11. If the answer to the line 11
question is “Yes,” provide a general
description of the business conducted
(or to be conducted) by the transferee,
including:
The location of the business;
The number of its employees; and
The nature of the business.
See Regulations section
1.6038B-1(c)(4)(i).

Line 12e. If the answer to line 12e is
“Yes”:
Describe any property transferred for
which gain is required to be recognized
under a provision of Regulations
sections 1.367(a)-2 through -7 other
than the provisions at issue on lines
12a-d and
For each such property described,
provide the specific regulation provision
under which gain is required to be
recognized.

Line 12b. If the answer to line 12b is
“Yes”:
Describe any property that is subject
to depreciation recapture under
Regulations section 1.367(a)-4(a). See
Regulations section 1.6038B-1(c)(4)(iii).
Specify with respect to each such
property:
1. The relevant recapture provision;

Section D, column (d). Provide a brief
explanation of how the arm’s length
price on the date of transfer for each
intangible was determined.
Section D, column (f). If an amount
greater than zero was included, provide
a brief explanation of how the income
inclusion for the year of the transfer was
determined.

-6-

Instructions for Form 926 (Rev. 12-2017)

Line 13b. Provide and explain the
calculation of the annual deemed
payment. See Temporary Regulations
section 1.6038B-1T(d)(1)(v). If
applicable, provide a calculation of the
gain required to be recognized on the
transfer of intangible property with
respect to which an election has been
made to treat the transfer as a sale
under Temporary Regulations section
1.367(d)-1T(g)(2). See Temporary
Regulations section 1.6038B-1T(d)(1)
(vi).
Line 14b. Provide and explain the
calculation of the annual deemed
payment. See Temporary Regulations
section 1.6038B-1T(d)(1)(v).
Line 14d. Provide a description of the
property and the amount of gain, if any,
reported under section 367(a)(1) with
respect to the property.
Line 15c. If the answer to the line 15c
question is “Yes,” describe the property
for which the transferor chose to apply
the 20-year inclusion period. See
Regulations sections 1.6038B-1(d)(1)
(iv) and 1.367(d)-1(c)(3)(ii).
Explain how the increase to the
deemed payment rate was calculated
for property transferred. See
Regulations sections 1.6038B-1(d)(1)
(iv) and 1.367(d)-1(c)(3)(ii). The
explanation should include how the
deemed payment rate was calculated
for each period of the useful life of the
intangible property and the 20-year
inclusion period.
Line 15d. If the answer to the question
on line 15c is “Yes,” explain how the

anticipated income or cost reduction
attributable to the property’s (or
properties’) use beyond the 20-year
period was estimated. See Regulations
section 1.6038B-1(d)(1)(iv).

Part IV— Additional
Information Regarding
Transfer of Property
Line 18. List the type of nonrecognition
transaction that gave rise to the
reporting obligation (for example,
section 332, 351, 354, 356, or 361).
Line 19a. If gain recognition was
required with respect to any transfer
reported in Part III under section 904(f)
(3), attach a statement identifying the
transfer and the amount of gain
recognized.
Line 19b. If gain recognition was
required with respect to any transfer
reported in Part III under section 904(f)
(5)(F), attach a statement identifying the
transfer and the amount of gain
recognized.
Line 19c. If recapture was required
with respect to any transfer reported in
Part III under section 1503(d) (dual
consolidated loss), attach a statement
identifying the transfer and the amount
of recapture. See section 1503(d) and
the regulations thereunder.
Line 19d. If exchange gain recognition
was required with respect to any
transfer reported in Part III under section
987, attach a statement identifying the
transfer and the amount of exchange

gain recognized. See Regulations
section 1.987-5.
Line 20. If this transfer resulted from a
change in entity classification (a
deemed transfer resulting from a
classification change on Form 8832,
Entity Classification Election, or a
termination of a section 1504(d)
election), check the “Yes” box. If the
transfer was an actual transfer of
property to a foreign corporation, check
the “No” box.
Line 21a. Check the “Yes” box on
line 21a if the domestic corporation
(domestic liquidating corporation) made
a distribution of property in complete
liquidation under section 332 to a
foreign corporation that meets the stock
ownership requirements of section
332(b) with respect to stock in the
domestic liquidating corporation.
If the answer to line 21a is "Yes,"
provide the following information in the
Supplemental Part III Information
Required To Be Reported section.
Preface this supplemental information
on the form with the heading “Section
367(e)(2) Information.”
A description, including the adjusted
tax basis and fair market value, of all
property distributed by the distributing
corporation (regardless of whether the
distribution of the property qualifies for
nonrecognition treatment).
An identification of the items of
property for which nonrecognition
treatment is claimed under Regulations
section 1.367(e)-2(b)(2)(ii) or (iii), as
applicable.

Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the
United States. You are required to give us the information. We need it to ensure that you are complying with these laws and to
allow us to figure and collect the right amount of tax.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless
the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long
as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return
information are confidential, as required by section 6103.
The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for
individual and business taxpayers filing this form is approved under OMB control numbers 1545-0074 and 1545-0123. The
estimated burden for all other taxpayers who file this form is shown below.
Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Learning about the law or the form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Preparing and sending the form to the IRS. . . . . . . . . . . . . . . . . . . . . . . . . . . .

7 hr., 48 min.
2 hr., 19 min.
4 hr., 57 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler, we
would be happy to hear from you. See the instructions for the tax return with which this form is filed.

Instructions for Form 926 (Rev. 12-2017)

-7-



---

Source Exif Data:

File Type                       : PDF
File Type Extension             : pdf
MIME Type                       : application/pdf
PDF Version                     : 1.7
Linearized                      : No
Creator                         : AH XSL Formatter V6.4 MR3 for Linux64 : 6.4.5.28610 (2017/04/21 19:43JST)
Modify Date                     : 2018:01:23 12:12:32-05:00
Trapped                         : False
Create Date                     : 2018:01:22 16:55:45-05:00
Subject                         : Instructions for Form 926, Return by a U.S. Transferor of Property to a Foreign Corporation
Producer                        : Antenna House PDF Output Library 6.4.1029 (Linux64); modified using iText 2.1.7 by 1T3XT
Author                          : W:CAR:MP:FP
Title                           : Instructions for Form 926 (Rev. December 2017)
Page Mode                       : UseOutlines
Language                        : EN
Tagged PDF                      : Yes
Page Count                      : 7

EXIF Metadata provided by EXIF.tools