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Department of the Treasury
Internal Revenue Service
Instructions for Form 926

(Rev. November 2018)
Return by a U.S. Transferor of Property to a Foreign Corporation

Section references are to the Internal • Transfers of stock or securities
Revenue Code unless otherwise noted. General Instructions for which a gain recognition
agreement (GRA) is filed. A U.S.
What's New Future Developments transferor must file a Form 926 with
For the latest information about
Form 926, line 1 is new. For transfers respect to a transfer of stock or
developments related to Form 926
occurring after 2017, taxpayers are securities in all cases in which a GRA
and its instructions, such as
required to specify whether a is filed under Regulations section
legislation enacted after they were
reportable property transfer was to a 1.367(a)-8. Provided that the initial
published, go to IRS.gov/Form926.
foreign corporation that is a GRA is timely filed (determined
non-controlled “specified 10%-owned without regard to Regulations section
Purpose of Form
foreign corporation” as defined in 1.367(a)-8(p)), then, with respect to
section 245A, which was added to the Use Form 926 to report certain the transfer of the stock or securities,
Code by section 14101(a) of the Tax transfers of tangible or intangible the U.S. transferor should (1)
Cuts and Jobs Act (TCJA) (P.L. property to a foreign corporation, as complete Part I and Part II of Form
115-97). required by section 6038B. 926; (2) complete columns (a) through
(e) of the "Stock and securities" line in
For transfers after 2017, section Who Must File Part III, Section B, of the form, and
14102(e) of the TCJA repealed the Generally, a U.S. citizen or resident, a check the “Yes” box on line 11; and
active trade or business exception domestic corporation, or a domestic (3) complete the Supplemental Part III
under section 367. Transfers of estate or trust must complete and file Information Required To Be Reported
tangible property (other than certain Form 926 to report certain transfers of section at the end of Part III of the
stock transfers) are subject to full gain property to a foreign corporation that form using the Line 11 instructions
recognition under the general rule of are described in section 6038B(a)(1) under the Supplemental Part III
section 367(a)(1). (A), 367(d), or 367(e). See section Information Required To Be Reported
TCJA section 14102(d) added section 6038B and Regulations sections section, later. In addition, the U.S.
91 to the Code. New section 91 1.6038B-1 and 1.6038B-1T for more transferor must comply in all material
provides rules for transfers of foreign information. respects with the terms of a GRA
(determined without regard to
branch assets to foreign corporations
requiring the transferor to include a Special Rules Regulations section 1.367(a)-8(p)) in
“Transferred Loss Amount” as • Transfers by a partnership. If the order to satisfy its section 6038B
income. transferor is a partnership (domestic reporting obligations. See Regulations
or foreign), the domestic partners of section 1.6038B-1 for further
For transfers in tax years beginning the partnership, not the partnership information.
after 2017, TCJA section 14221 itself, are required to comply with • Distributions by domestic
revised the definition of intangible section 6038B and file Form 926. liquidating corporations. A
property under section 936(h)(3)(B) Each domestic partner is treated as a domestic liquidating corporation must
so that it now includes goodwill, going transferor of its proportionate share of file a Form 926 with respect to a
concern value, workforce in place, the property. See the instructions for distribution of property in complete
and any other item the value or line 3 for additional information. liquidation under section 332 to a
potential value of which is not • Transfers by spouses. Spouses foreign distributee corporation that
attributable to tangible property or the may file Form 926 jointly, but only if meets the stock ownership
services of an individual. The they file a joint income tax return. requirements of section 332(b). If the
definition in section 936(h)(3)(B) was • Transfers of cash. A U.S. person distribution qualifies for the exception
subsequently redesignated (without that transfers cash to a foreign in Regulations section 1.367(e)-2(b)
substantive change from TCJA) as corporation must report the transfer (2)(i) or (iii), then, provided that all
section 367(d)(4) by Division U, Title on Form 926 if (a) immediately after initial liquidation documents are timely
IV, section 401(d)(1)(D)(viii)(l) of the the transfer, the person holds, directly filed (determined without regard to
Consolidated Appropriations Act, or indirectly, at least 10% of the total Regulations section 1.367(e)-2(f)), the
2018, P.L. 115-141. This revision voting power or the total value of the domestic liquidating corporation
affects the question on Form 926, foreign corporation; or (b) the amount should complete Form 926 and, in the
line 13 and the information entered on of cash transferred by the person to Supplemental Information Required
Form 926, Part III, Section C. the foreign corporation during the To Be Reported section at the end of
12-month period ending on the date of Part III of the form, note that the
the transfer is more than $100,000. information required by Form 926 is
See Regulations section 1.6038B-1(b) contained in the statement required
(3). by Regulations section 1.367(e)-2(b)

Oct 30, 2018 Cat. No. 27037X

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(2)(i)(C)(2) or (iii)(D). In addition, the • The transfer was taxable to the U.S. statute of limitations with respect to
domestic liquidating corporation must transferor under Regulations section the gain realized but not recognized
comply in all material respects with 1.367(a)-3(c) and such person on the transfer.
the terms of a liquidation document properly reported the income from the
(determined without regard to transfer on its timely filed return Penalties for Failure To File
Regulations section 1.367(e)-2(f)) in (including extensions) for the tax year If a taxpayer fails to comply with
order to satisfy its section 6038B that includes the date of transfer, or section 6038B, the penalty equals
reporting obligations. See specific • The transfer is considered to be to 10% of the fair market value of the
instructions for lines 20a and 20b in a foreign corporation solely by reason property at the time of the transfer.
Part IV—Additional Information of Regulations section 1.83-6(d)(1) The penalty will not apply if the failure
Regarding Transfer of Property, later, and the fair market value of the to comply is due to reasonable cause
for more information. See Regulations property transferred did not exceed and not to willful neglect. The penalty
section 1.6038B-1 for further $100,000. is limited to $100,000 unless the
failure to comply was due to
information. b. The U.S. transferor owned 5%
intentional disregard. Moreover, the
or more of the total voting power or
period of limitations for assessment of
Exceptions to Filing the total value of the transferee
tax upon the transfer of that property
1. For exchanges described in foreign corporation immediately after
is extended to the date that is 3 years
section 354 or 356, a U.S. person the transfer and:
after the date on which the information
does not have to file Form 926 if: • The U.S. transferor is a tax-exempt
required to be reported is provided.
a. The U.S. person exchanges entity and the income was not
stock of a foreign corporation in a unrelated business income, or Section 6662(j) Penalty
recapitalization described in section • The transfer was taxable to the U.S. A 40% penalty may be imposed on
368(a)(1)(E), or transferor and such person properly any underpayment resulting from an
reported the income from the transfer undisclosed foreign financial asset
b. The U.S. person exchanges on its timely filed return, or understatement. No penalty will be
•
stock of a domestic or foreign The transfer is considered to be to imposed with respect to any portion of
corporation for stock of a foreign a foreign corporation solely by reason an underpayment if the taxpayer can
corporation under an asset of Regulations section 1.83-6(d)(1) demonstrate that the failure to comply
reorganization described in section and the fair market value of the was due to reasonable cause with
368(a)(1) that is not treated as an property transferred did not exceed respect to such portion of the
indirect stock transfer under $100,000. underpayment and the taxpayer acted
Regulations section 1.367(a)-3(d).
in good faith with respect to such
2. Generally, a domestic When and How To File portion of the underpayment. See
corporation that distributes stock or Form 926 must be filed with the U.S. sections 6662(j) and 6664(c) for
securities of a domestic corporation transferor's income tax return (or, if additional information.
under section 355 is not required to applicable, exempt organization
file Form 926. However, this return) for the tax year that includes
exception does not apply if the the date of the transfer. Specific Instructions
distribution is of stock or securities of
a foreign controlled corporation to a The Form 926 filed with the Important: All information reported on
Form 926 must be in English. All
distributee shareholder who is not a ! IRS must include the amounts must be stated in U.S.
U.S. citizen or resident or a domestic CAUTION additional information
corporation. See specific instructions required in Regulations sections dollars. If the information required in a
for Part IV, line 21, later, for more 1.6038B-1(c) through (e) and given section exceeds the space
information. Temporary Regulations sections provided within that section, do not
1.6038B-1T(c) and (d). write “see attached” in the section and
3. A U.S. person that transfers then attach all of the information on
stock or securities under section additional sheets. Instead, complete
Other Forms That May Be
367(a) does not have to file Form 926 all entry spaces in the section and
if either or below applies.a b Required
attach the remaining information on
a. The U.S. transferor owned less Persons filing this form may be additional sheets. The additional
than 5% of both the total voting power required to file FinCEN Form 114, sheets must conform with the IRS
and the total value of the transferee Report of Foreign Bank and Financial version of that section.
foreign corporation immediately after Accounts (FBAR).
the transfer and: A U.S. transferor that is required to
• The U.S. transferor qualified for enter into a GRA under section 367 to
nonrecognition treatment with respect qualify for nonrecognition treatment
to the transfer, or must file Form 8838, Consent To
• The U.S. transferor is a tax-exempt Extend the Time To Assess Tax
entity and the income was not Under Section 367—Gain
unrelated business income, or Recognition Agreement, to extend the

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Part I—U.S. Transferor the controlling shareholders and their below) you have assigned to the
identifying numbers. transferee foreign corporation.
Information
Line 2c. If the transferor was a A “reference ID number” is a
Identifying number. The identifying number established by or on behalf of
member of an affiliated group filing a
number of an individual is his or her the U.S. transferor identified at the top
consolidated tax return (see sections
social security number (SSN). The of page 1 of the form that is assigned
1501 through 1504), but was not the
identifying number of all others is their to the transferee foreign corporation
parent corporation, list the name and
employer identification number (EIN). with respect to which Form 926
EIN of the parent corporation and file
Line 1. Check the “Yes” box on Form 926 with the parent reporting is required. These numbers
line 1 if the transferee is a specified corporation's consolidated return. are used to uniquely identify the
10%-owned foreign corporation that is transferee foreign corporation in order
Line 2d. If the answer to line 2d is
not a controlled foreign corporation to keep track of the entity from tax
"Yes," and if the asset is transferred in
(as defined in section 957(a)). year to tax year. The reference ID
an exchange described in section number must meet the requirements
A specified 10%-owned foreign 361(a) or (b), attach the following. set forth below.
corporation is defined in section • A statement that the conditions set
245A(b)(1) as any foreign corporation forth in the second sentence of Note. Because reference ID numbers
with respect to which any domestic section 367(a)(4) and any regulations are established by or on behalf of the
corporation is a U.S. shareholder. A under that section have been U.S. person filing Form 926, there is
controlled foreign corporation is satisfied. no need to apply to the IRS to request
defined in section 957(a) as any • An explanation of any basis or other a reference ID number or for
foreign corporation if, on any day adjustments made pursuant to section permission to use these numbers.
during the tax year of such foreign 367(a)(4) and any regulations
corporation, U.S. shareholders own thereunder. Note. In general, the reference ID
(within the meaning of section number assigned to a transferee
958(a)), or are considered to own by Line 3. If a partnership (whether
foreign corporation on Form 926 has
applying the rules of ownership of foreign or domestic) transfers property
relevance only to Form 926 and
section 958(b), more than 50% of (1) to a foreign corporation in an
should not be used with respect to the
the total combined voting power of all exchange described in section 367(a)
transferee foreign corporation on
classes of stock of such corporation (1), then any U.S. person that is a
other IRS forms.
entitled to vote, or (2) the total value of partner in the partnership shall be
the stock of such corporation. treated as having transferred a Requirements. The reference ID
proportionate share of the property in number must be alphanumeric
Check the “No” box on line 1 and an exchange described in section (defined below) and no special
check the “Yes” box in Part II, line 9, if 367(a)(1). A U.S. person's characters or spaces are permitted.
the transferee foreign corporation is a proportionate share of partnership The length of a given reference ID
controlled foreign corporation. property shall be determined under number is limited to 50 characters.
Line 2a. If you answered “Yes” to the rules and principles of sections For these purposes, the term
question 2a and the asset is stock, 701 through 761 and the regulations “alphanumeric” means the entry can
section 367(a)(4) may require basis thereunder. See Temporary be alphabetical, numeric, or any
adjustments. If you answered “No” to Regulations section 1.367(a)-1T(c) combination of the two.
question 2a and the asset is a tangible (3).
The same reference ID number
asset, the transfer is taxable under Line 3d. For the definition of must be used consistently from tax
sections 367(a)(1) and (a)(4). If the “regularly traded on an established year to tax year with respect to a given
asset transferred is an intangible securities market,” see Temporary transferee foreign corporation. If for
asset, see section 367(d) and its Regulations section 1.367(a)-1T(c)(3) any reason a reference ID number
regulations. (ii)(D). If the answer to line 3d is “Yes,” falls out of use (for example, the
If you answered “No” to question the rules of Temporary Regulations transferee foreign corporation no
2a: If the U.S. transferor is owned section 1.367(a)-1T(c)(3)(ii)(C) apply. longer exists due to disposition or
directly by more than five domestic liquidation), the reference ID number
corporations immediately before the Part II—Transferee used for that transferee foreign
reorganization, but some combination corporation cannot be used again for
Foreign Corporation
of five or fewer domestic corporations another transferee foreign corporation
controls the U.S. transferor, the U.S. Information
for purposes of Form 926 reporting.
transferor must designate the five or Line 5b, Reference ID number. A There are some situations that
fewer domestic corporations that reference ID number is required on warrant correlation of a new reference
comprise the control group. List these line 5b only in cases where no EIN ID number with a previous reference
designated corporations on Form 926, was entered on line 5a for the ID number when assigning a new
line 2b. transferee foreign corporation. reference ID number to a transferee
Line 2b. If the transferor went out of However, filers are permitted to enter foreign corporation. For example:
existence pursuant to the transfer (for both an EIN and a reference ID • In the case of a merger or
example, as in a reorganization number. If applicable, enter on line 5b acquisition, a Form 926 filer must use
described in section 368(a)(1)(C)), list the reference ID number (defined a reference ID number which

Instructions for Form 926 (Rev. 11-2018) -3-

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correlates the previous reference ID a controlled foreign corporation Stock and securities. In column
number with the new reference ID immediately after the transfer. (b), for each stock or security, provide
number assigned to the transferee the class or type and the name of the
foreign corporation; or Part III—Information issuing corporation. See the Line 11
• In the case of an entity Regarding Transfer of instructions in the Supplemental Part
classification election that is made on III Information Required To Be
behalf of a transferee foreign Property
corporation on Form 8832, Information in Part III is reported in Reported section, later, for additional
Regulations section 301.6109-1(b)(2) three sections. Collectively, the three reporting requirements.
(v) requires the transferee foreign sections capture information with Property with built-in loss.
corporation to have an EIN for this regard to all of the properties Complete columns (a) through (d)
election. For the first year that Form transferred. The properties covered including the description of each item
926 is filed after an entity by each section, respectively, are: transferred with a built-in loss that is
classification election is made on • Cash (“Section A”), realized but not recognized. Section
behalf of the transferee foreign • Other property (other than 367(a)(1) requires gain recognition
corporation on Form 8832, you must intangible property subject to section attributed to transferred property
enter the new EIN on line 5a and the 367(d)) (“Section B”), and (other than intangible property subject
old reference ID number on line 5b. In • Intangible property subject to to section 367(d) or certain stock
subsequent years, the Form 926 filer section 367(d) (“Section C”). transfers under section 367(a) if
may continue to enter both the EIN For information that generally must certain conditions are met); however,
and the reference ID number, but be included for a transfer described in such gain recognized on the
must enter at least the EIN on line 5a. section 6038B(a)(1)(A), see the transferred property may not be
In the case of a merger or beginning of the Supplemental Part III reduced or netted by realized losses
acquisition, you must correlate the Information Required To Be Reported attributed to transferred built-in loss
reference ID numbers as follows: New section, later. property. No loss is allowed under
section 367(a)(1) for transferred
reference ID number [space] Old If additional row(s) are needed to built-in loss property.
reference ID number. If there is more enter information for a property If the transfer was a distribution of
than one old reference ID number, category in a Section in Part III, property in complete liquidation under
you must enter a space between each provide the information in the same section 332, you must complete
such number. As indicated above, the format as required for the row in the columns (a) through (d) as described
length of a given reference ID number Section at issue in the Supplemental above. You may use any built-in
is limited to 50 characters and each Part III Information Required To Be losses under section 367(e)(2) to
number must be alphanumeric with no Reported section. For each property reduce the overall recognized gain
special characters. category with such additional row(s), from the liquidating distribution, but
Note. This correlation requirement in the Section enter “See not below zero, for purposes of
applies only to the first year the new Supplemental” under column (b), determining the amount entered on
reference ID number is used. Description of Property, on the last line 20b in Part IV. See Regulations
row of the property category and enter section 1.367(e)-2(b)(1)(ii)(B) for the
Line 6, Address. Enter the in the remaining columns on that last overall loss limitation.
information in the following order: city, row the aggregated amounts from the
province or state, and country. Follow corresponding columns on the In general, the following
the country's practice for entering the additional rows. instructions apply to columns (a)
postal code, if any. Do not abbreviate through (e).
the country name; however, if you file For distributions covered by section
electronically, please follow the 367(e)(2), see the instructions for Column (a), Date of transfer. Enter
convention specified. lines 20a through 20c, later. the first date on which title to,
possession of, or rights to the use of
Line 7. Enter the two-letter country Section A the property passed for U.S. income
code (from the list at IRS.gov/ Section A captures information tax purposes. See Temporary
countrycodes) of the transferee regarding cash. Regulations section 1.6038B-1T(b)(4)
foreign corporation's country of Line 10. If cash was the only property for additional information.
incorporation or organization. transferred, skip the remainder of Part Column (b), Description of proper-
Line 8. List the entity classification III and proceed to Part IV. ty. Provide a description of the
(for example, partnership, property transferred.
corporation, etc.) of the transferee Section B
foreign corporation under the laws of Section B captures information Column (c), Fair market value on
the country of incorporation or regarding property (other than cash date of transfer. Enter the fair
organization. and intangible property subject to market value of the property
section 367(d)) that is subject to full transferred (measured as of the date
Line 9. See section 957(a) to gain recognition under the general of transfer).
determine whether the corporation is rule of section 367(a)(1).

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Column (d), Cost or other basis.         foreign corporation. The transferred     Column (a), Date of transfer.          Enter 
Enter the adjusted basis in the          loss amount determined under             the first date on which title to, 
property transferred on the date of the  section 91(b) is:                        possession of, or rights to the use of 
transfer. See sections 1011 through      1. The sum of losses incurred by         the property passed for U.S. income 
1016 for more information for the        the foreign branch or FDE after          tax purposes. See Temporary 
determination of adjusted basis.         December 31, 2017, and before the        Regulations section 1.6038B-1T(b)(4) 
                                         transfer and with respect to which a     for additional information.
Column (e), Gain recognized on 
                                         deduction was allowed to the U.S. 
transfer. Enter the gain recognized                                               Column (b), Description of proper-
                                         transferor, reduced by;
on the transfer of each property.                                                 ty. Provide a separate description for 
                                         2. The sum of:                           each identified intangible, including 
Line 11.  Indicate whether a gain 
recognition agreement was filed          a. Any taxable income of such            each identified (i) patent, invention, 
pursuant to Regulations section          branch for a tax year after the tax year formula, process, design, pattern, or 
1.367(a)-8 for a transfer of stock or    in which the loss was incurred and       know-how; (ii) copyright, literary, 
securities. If “Yes,” complete the       through the close of the tax year of the musical, or artistic composition; (iii) 
Supplemental Part III Information        transfer, and                            trademark, trade name, or brand 
Required To Be Reported section at       b. Any amount recognized under           name; (iv) franchise, license, or 
the end of Part III using the Line 11    section 904(f)(3) resulting from the     contract; (v) method, program, 
instructions under the Supplemental      transfer.                                system, procedure, campaign, survey, 
                                                                                  study, forecast, estimate, customer 
Part III Information Required To Be 
                                         See section 91(c) and the transition     list, or technical data; (vi) any 
Reported section, later.
                                         rule provided by TCJA section            goodwill, going concern value, or 
Line 12a. Check “Yes” to line 12a if     14102(d)(4) for a possible reduction     workforce in place (including its 
any of the property transferred to a     of the transferred loss amount in        composition and terms and conditions 
foreign corporation consisted of         certain circumstances.                   (contractual or otherwise) of its 
assets of a foreign branch (or a         If the transferred loss amount is        employment); or (vii) any other item 
branch that is a foreign disregarded     zero or less, enter zero on line 12d (no  the value or potential value of which is 
entity (FDE)). If you check “Yes,”       transferred loss amount is required to   not attributable to tangible property or 
continue to line 12b; otherwise skip     be recognized by the U.S. transferor     the services of any individual.
lines 12b through 12d.                   on the transfer under section 91).       Column (c), Useful life.   Enter the 
Line 12b.  Check “Yes” to line 12b if    If the transferred loss amount is        useful life for each intangible. The 
the property transferred to a specified  greater than zero, enter the amount as   useful life of intangible property is 
10%-owned foreign corporation            a positive number on line 12d and        defined under Regulations section 
consisted of substantially all of the    report this amount as other income on    1.367(d)-1(c)(3)(i). If the useful life of 
assets of a foreign branch (or a         Form 1120, page 1, line 10 (other        intangible property is indefinite, enter 
branch that is an FDE). If you check     income) or on the corresponding line     “indefinite.” Regulations section 
“Yes” to line 12b, you must complete     of the applicable 1120-series form.      1.367(d)-1(c)(3)(ii) is not relevant to 
line 12c. See the definition of          Identify the amount as “Section 91       the determination of the useful life 
specified 10%-owned foreign              Transferred Loss Amount.” See also       entered in column (c).
corporation in the instructions to       the Line 12d instructions under the      Column (d), Arm’s length price on 
line 1, earlier; however, for these      Supplemental Part III Information        date of transfer. Generally, if a U.S. 
purposes, the definition applies         Required To Be Reported section,         person transfers intangible property 
without regard to whether the            later, for additional information that   subject to section 367(d), such person 
corporation is a controlled foreign      must be reported.                        shall, over the useful life of the 
corporation.
                                         Section C                                property, annually include in gross 
Line 12c. Check “Yes” to line 12c if                                              income an amount that represents an 
the transferor was a domestic            Section C captures information 
                                                                                  appropriate arm’s length charge for 
corporation and immediately after the    regarding transfers of intangible 
                                                                                  use of the property. The appropriate 
transfer the domestic corporation was    property subject to section 367(d).
                                                                                  charge is determined in accordance 
a U.S. shareholder (10%-or-more          Property described in section            with the provisions of section 482 and 
shareholder) with respect to the         367(d)(4).  Complete columns (a)         the regulations thereunder. See 
transferee foreign corporation. If       through (f) for each identified          Temporary Regulations section 
“Yes,” continue to line 12d; otherwise   transferred section 367(d)(4)            1.367(d)-1T(c)(1). For each intangible 
skip line 12d.                           intangible. See the related instructions  reported in Section C, provide the 
Line 12d.  Under section 91, the U.S.    for Section C under the Supplemental     arm’s length price on the date of 
transferor must include in gross         Part III Information Required To Be      transfer. See the instructions below 
income an amount equal to the            Reported section at the end of Part III, for information that must be included 
transferred loss amount, if any, as      later, for additional information that   in the Supplemental Part III 
defined in section 91(b) upon a          you must report.                         Information Required To Be Reported 
transfer of substantially all of the     In general, the following                section.
assets of a foreign branch (including a  instructions apply to columns (a) 
foreign branch that is an FDE) to a      through (f).

Instructions for Form 926 (Rev. 11-2018)                   -5-

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Column (e), Cost or other basis. section 367(d), to reflect amounts Additional Section rows. If you
Enter the adjusted basis in the that, but for the choice to increase need additional rows to enter
property transferred on the date of the annual inclusions, would have been information for a property category in
transfer. See sections 1011 through required to be included following the a Section in Part III, provide the
1016 for more information for the end of the 20-year period. To apply information in the same format as
determination of adjusted basis. this 20-year inclusion period, a required for the row in the Section at
taxpayer must attach a statement issue in the Supplemental Part III
Column (f), Income inclusion for titled “Application of the 20-year Information Required To Be Reported
year of transfer. A U.S. person who Inclusion Period to Section 367(d) section. See the beginning of the Part
transfers property subject to section Transfer” to a timely filed original III instructions, earlier, for how to
367(d) is treated as having sold such federal income tax return (including incorporate the information from the
property in exchange for payments extensions) for the year of the additional rows.
which are contingent upon the transfer. See Regulations section
productivity, use, or disposition of 1.367(d)-1(c)(3)(ii). If the answer to Line 11. If the answer to the line 11
such property and receiving amounts line 14c is “Yes,” see the Line 14c and question is “Yes,” for any stock or
annually over the useful life of the Line 14d instructions below for securities transferred, provide a
property that represent an appropriate information that must be included in general description of the corporation
arm’s length charge for use of the the Supplemental Part III Information issuing the stock or securities. See
property. For each intangible Required To Be Reported section at Regulations section 1.6038B-1(c)(4)
transferred, enter the amount included the end of Part III of the form. (ii).
in income under section 367(d) on the
income tax return for the year of the Supplemental Part III Lines 12b–d. If the answer to lines
12b and 12c is “Yes,” provide the
transfer. If the amount reported in Information Required To Be following information.
column (d) as the arm’s length price Reported • Describe the foreign branch whose
for intangible property is an allocation
of an amount determined based on an Information to be generally repor- property is transferred.
aggregate analysis, enter the ted for a transfer described in sec- • Describe the property of the foreign
inclusion amount in column (f) that tion 6038B(a)(1)(A). Provide a branch, including its adjusted basis
corresponds to the allocated amount general description of the transfer and and fair market value.
reported in column (d). If no amount is any wider transaction of which it forms • Set forth a detailed calculation of
so included, enter “0.” Include in the a part, including a chronology of the the transferred loss amount. Provide,
amount entered in column (f) gain transfers involved and an on a year-by-year basis, amounts of
recognized as a result of making an identification of the other parties to the the losses generated by such foreign
election to treat a transfer of certain transaction to the extent known. See branch after December 31, 2017, as
intangible property as a sale under Temporary Regulations section well as any income amounts
Temporary Regulations section 1.6038B-1T(c)(2)(ii). generated after such loss year.
1.367(d)-1T(g)(2). The amount Provide a description of the • Provide the amount, if any,
recognized under section 904(f)(3) on
entered in column (f) should reflect consideration received by the U.S.
account of the transfer.
the application of Regulations section person making the transfer. The
• Set forth a detailed summary of the
1.367(d)-1(c)(3)(ii), if properly chosen. description should identify:
gain (other than the section 91
See line 14c and related instructions • The property comprising the
transferred loss amount) recognized
below. See also the Line 14c consideration and the total fair market
by the transferor, including any
instructions under the Supplemental value of the items; and
section 367(a)(1) gain recognized on
Part III Information Required To Be • In the case of stock or securities,
the transfer of property. See section
Reported section, later, for additional the class, type, amount, and
91(c).
information that must be reported. characteristics of the interest
received. • Set forth a calculation of the net
Line 14c. In cases where the useful sum of the previously deducted losses
life of the transferred intangible See Temporary Regulations incurred by such foreign branch for
property is indefinite or reasonably sections 1.6038B-1T(c)(3) and tax years before January 1, 2018, that
anticipated to be more than 20 years, 1.6038B-1T(d)(1)(iii). would have been recaptured under
a taxpayer may, instead of including Information to be reported. When section 367(a)(3)(C), as determined
amounts in income during the entire providing any information in the without regard to the repeal of the
useful life of the intangible property, Supplemental Part III Information section 367(a)(3) active trade or
choose in the year of transfer to Required To Be Reported section, business exception. See the transition
increase annual inclusions during the indicate the Section, column, row, and rule provided by TCJA section
20-year period beginning with the first line for which the information is being 14102(d)(4).
year in which the U.S. transferor takes provided.
into account income pursuant to

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Section C, column (d). Provide a rise to the reporting obligation (for complete liquidation under section
brief explanation of how you example, section 332, 351, 354, 356, 332 to a foreign corporation that
determined the arm’s length price on or 361). meets the stock ownership
requirements of section 332(b) with
the date of transfer for each Line 18a. If gain recognition was
respect to stock in the domestic
intangible. required under section 904(f)(3) with
liquidating corporation.
Section C, column (f). If you respect to any transfer reported in
included an amount greater than zero, Part III, attach a statement identifying If the answer to line 20a is "Yes,"
provide a brief explanation of how you the transfer and the amount of gain complete lines 20b and 20c and
figured the income inclusion for the recognized. provide the following information in
the Supplemental Part III Information
year of the transfer. Provide and Line 18b. If gain recognition was Required To Be Reported section.
explain the calculation of the annual required under section 904(f)(5)(F) Preface this supplemental information
deemed payment. See Temporary with respect to any transfer reported on the form with the heading “Section
Regulations section 1.6038B-1T(d)(1) in Part III, attach a statement 367(e)(2) Information.”
(v). identifying the transfer and the A description, including the
•
Line 14c. If the answer to the line 14c amount of gain recognized. adjusted tax basis and fair market
question is “Yes,” describe the Line 18c. If recapture was required value, of all property distributed by the
property for which the transferor under section 1503(d) (dual distributing corporation (regardless of
chose to apply the 20-year inclusion consolidated loss) with respect to any whether the distribution of the
period. See Regulations sections transfer reported in Part III, attach a property qualifies for nonrecognition
1.6038B-1(d)(1)(iv) and 1.367(d)-1(c) statement identifying the transfer and treatment).
(3)(ii). the amount of recapture. See section • If the answer to line 20c is "Yes," an
Explain how you figured the 1503(d) and the regulations identification of the items of property
increase to the deemed payment rate thereunder. for which nonrecognition treatment is
claimed under Regulations section
for property transferred. See Line 18d. If exchange gain
1.367(e)-2(b)(2)(ii) or (iii), as
Regulations sections 1.6038B-1(d)(1) recognition was required under
applicable.
(iv) and 1.367(d)-1(c)(3)(ii). The section 987 with respect to any
explanation should include how you transfer reported in Part III, attach a Line 20b. If the answer to line 20a is
figured the deemed payment rate for statement identifying the transfer and “Yes,” enter the total amount of gain or
each period of the useful life of the the amount of exchange gain loss recognized according to
intangible property and the 20-year recognized. See Regulations section Regulations section 1.367(e)-(2)(b).
inclusion period. 1.987-5. Under section 367(e)(2), you may not
recognize loss in excess of gain on
Line 14d. If the answer to the Line 19. If this transfer resulted from
the distribution. If realized losses
question on line 14c is “Yes,” explain a change in entity classification (a
exceed recognized losses on
how you estimated the anticipated deemed transfer resulting from a
transferred property, the loss is
income or cost reduction attributable classification change on Form 8832,
recognized on a pro rata basis and
to the property’s (or properties’) use Entity Classification Election, or a
used to offset recognized gain on
beyond the 20-year period. See termination of a section 1504(d)
other transferred property in the
Regulations section 1.6038B-1(d)(1) election), check the “Yes” box. If the
category of assets (that is, capital or
(iv). transfer was an actual transfer of
ordinary), but not below zero. Enter
property to a foreign corporation,
the net amount on line 20b.
Part IV— Additional check the “No” box.
Information Regarding
Line 20a. Check the “Yes” box on
Transfer of Property line 20a if the domestic corporation
Line 17. List the type of (domestic liquidating corporation)
nonrecognition transaction that gave made a distribution of property in

Instructions for Form 926 (Rev. 11-2018) -7-

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Line 20c. If the answer to line 20c is intangible property do not qualify for controlled corporation to a foreign
“Yes,” see Regulations section nonrecognition and thus are subject to corporation. Section 367(e)(1) and
1.367(e)-2(b)(2)(i) for further guidance gain recognition. Regulations section 1.367(e)-1
require the distributing domestic
on the conditions for nonrecognition Line 21. Check “Yes” to line 21 if the
corporation to recognize gain (not
for distributions of certain qualifying transferor is a domestic corporation
loss) on the distribution. See
property and additional reporting that makes a section 355 distribution
Regulations section 1.367(e)-1(b) for
documentation that is required. (or so much of section 356 as relates
the computation of recognized gain.
Distributions of section 367(d)(4) to section 355) of stock in a foreign

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-8- Instructions for Form 926 (Rev. 11-2018)

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