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Department of the Treasury
Internal Revenue Service
Instructions for Form 926

(Rev. December 2017)
Return by a U.S. Transferor of Property to a Foreign Corporation

Section references are to the Internal Revenue partnership, not the partnership itself, section 332 to a foreign distributee
Code unless otherwise noted. are required to comply with section corporation that meets the stock
6038B and file Form 926. Each ownership requirements of section
What's New domestic partner is treated as a 332(b). If the distribution qualifies for the
transferor of its proportionate share of exception in Regulations section
The regulations addressing the active
the property. See the instructions for 1.367(e)-2(b)(2)(i) or (iii) then, provided
trade or business (ATB) exception and
line 2 for additional information. that all initial liquidation documents are
the transfer of intangible property under
Transfers by spouses. Spouses timely filed (determined without regard
section 367(a), 367(d), and 6038B have
may file Form 926 jointly, but only if they to Regulations section 1.367(e)-2(f)),
been finalized and are generally
file a joint income tax return. the domestic liquidating corporation
effective for transfers occurring on or
Transfers of cash. A U.S. person should (1) complete Part I and Part II of
after September 14, 2015. See Part III,
that transfers cash to a foreign the Form 926, (2) in the Supplemental
Information Regarding Transfer of
corporation must report the transfer on Information Required To Be Reported
Property, later.
Form 926 if (a) immediately after the section at the end of Part III of the form,
For transfers after December transfer, the person holds directly or note that the information required by
! 31, 2017, P.L. 115-97, section indirectly, at least 10% of the total voting Form 926 is contained in the statement
CAUTION 14102 modifies the rules power or the total value of the foreign required by Regulations section
pertaining to transfers of loss amounts corporation, or (b) the amount of cash 1.367(e)-2(b)(2)(i)(C)(2) or (iii)(D), as
from foreign branches to certain foreign transferred by the person to the foreign the case may be, and (3) complete Part
corporations and repeals the active corporation during the 12-month period IV. In addition, the domestic liquidating
trade or business exception. If a revised ending on the date of the transfer corporation must comply in all material
Form 926 is unavailable at the time a exceeds $100,000. See Regulations respects with the terms of a liquidation
taxpayer is required to file Form 926 for section 1.6038B-1(b)(3). document (determined without regard to
such transfers, see IRS.gov/Form926 Transfers of stock or securities for Regulations section 1.367(e)-2(f)) in
for instructions for filing the December which a gain recognition agreement order to satisfy its section 6038B
2017 Form 926 for these transfers. (GRA) is filed. A U.S. transferor must reporting obligations. See Regulations
file a Form 926 with respect to a transfer section 1.6038B-1 for further
of stock or securities in all cases in information.
General Instructions which a GRA is filed under Regulations
section 1.367(a)-8. Provided that the Exceptions to Filing
Future Developments initial GRA is timely filed (determined 1. For exchanges described in
For the latest information about without regard to Regulations section section 354 or 356, a U.S. person does
developments related to Form 926 and 1.367(a)-8(p)), then, with respect to the not have to file Form 926 if:
its instructions, such as legislation transfer of the stock or securities, the
enacted after they were published, go to U.S. transferor should (1) complete Part a. The U.S. person exchanges
IRS.gov/Form926. I and Part II of the Form 926, (2) stock of a foreign corporation in a
complete columns (a) through (e) of the recapitalization described in section
Purpose of Form "Stock and securities" line in Part III, 368(a)(1)(E), or
Use Form 926 to report certain transfers Section A, of the form, and check the b. The U.S. person exchanges
of tangible or intangible property to a “Yes” box on line 10, and (3) complete stock of a domestic or foreign
foreign corporation required by section the Supplemental Part III Information corporation for stock of a foreign
6038B. Required To Be Reported section at the corporation under an asset
end of Part III of the form using the reorganization described in section
Who Must File Line 10 instructions under the 368(a)(1) that is not treated as an
Supplemental Part III Information indirect stock transfer under
Generally, a U.S. citizen or resident, a
Required To Be Reported section, later. Regulations section 1.367(a)-3(d).
domestic corporation, or a domestic
In addition, the U.S. transferor must
estate or trust must complete and file 2. Generally, a domestic corporation
comply in all material respects with the
Form 926 to report certain transfers of that distributes stock or securities of a
terms of a GRA (determined without
property to a foreign corporation that are domestic corporation under section 355
regard to Regulations section
described in section 6038B(a)(1)(A), is not required to file Form 926.
1.367(a)-8(p)) in order to satisfy its
367(d), or 367(e). See section 6038B, However, this exception does not apply
section 6038B reporting obligations.
and Regulations sections 1.6038B-1 if the distribution is of stock or securities
See Regulations section 1.6038B-1 for
and 1.6038B-1T for more information. of a foreign controlled corporation to a
further information. distributee shareholder who is not a
Distributions by domestic U.S. citizen or resident or a domestic
Special Rules liquidating corporations. A domestic corporation.
Transfers by a partnership. If the liquidating corporation must file a Form
transferor is a partnership (domestic or 926 with respect to a distribution of 3. A U.S. person that transfers stock
foreign), the domestic partners of the property in complete liquidation under or securities under section 367(a) does

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not have to file Form 926 if either ora b qualify for nonrecognition treatment identifying number of all others is their
below applies. must file Form 8838, Consent To employer identification number (EIN).
a. The U.S. transferor owned less Extend the Time To Assess Tax Under
Line 1a. If you answered “Yes” to
than 5% of both the total voting power Section 367—Gain Recognition
question 1a and the asset is a tangible
and the total value of the transferee Agreement, to extend the statute of
asset, section 367(a)(5) may require
foreign corporation immediately after limitations with respect to the gain
basis adjustments. If you answered “No”
the transfer and: realized but not recognized on the
to question 1a and the asset is a
The U.S. transferor qualified for transfer.
tangible asset, the transfer is taxable
nonrecognition treatment with respect to Penalties for Failure To File under sections 367(a)(1) and (a)(5). If
the transfer, or the asset transferred is an intangible
The U.S. transferor is a tax-exempt If a taxpayer fails to comply with section
entity and the income was not unrelated 6038B, the penalty equals 10% of the asset, see section 367(d) and its
business income, or fair market value of the property at the regulations.
The transfer was taxable to the U.S. time of the transfer. The penalty will not If you answered “No” to question 1a:
transferor under Regulations section apply if the failure to comply is due to If the U.S. transferor is owned directly
1.367(a)-3(c) and such person properly reasonable cause and not to willful by more than five domestic corporations
reported the income from the transferor neglect. The penalty is limited to immediately before the reorganization,
on its timely filed return (including $100,000 unless the failure to comply but some combination of five or fewer
extensions) for the tax year that was due to intentional disregard. domestic corporations controls the U.S.
includes the date of transfer, or Moreover, the period of limitations for transferor, the U.S. transferor must
The transfer is considered to be to a assessment of tax upon the transfer of designate the five or fewer domestic
foreign corporation solely by reason of that property is extended to the date corporations that comprise the control
Regulations section 1.83-6(d)(1) and that is 3 years after the date on which group. List these designated
the fair market value of the property the information required to be reported corporations on Form 926, line 1b.
transferred did not exceed $100,000. is provided. Line 1b. If the transferor went out of
b. The U.S. transferor owned 5% or Section 6662(j) Penalty existence pursuant to the transfer (for
example, as in a reorganization
more of the total voting power or the For tax years beginning after March 18,
described in section 368(a)(1)(C)), list
total value of the transferee foreign 2010, a 40% penalty may be imposed
the controlling shareholders and their
corporation immediately after the on any underpayment resulting from an
identifying numbers.
transfer and: undisclosed foreign financial asset
The U.S. transferor is a tax-exempt understatement. No penalty will be Line 1c. If the transferor was a member
entity and the income was not unrelated imposed with respect to any portion of of an affiliated group filing a
business income, or an underpayment if the taxpayer can consolidated tax return (see sections
The transfer was taxable to the U.S. demonstrate that the failure to comply 1501 through 1504), but was not the
transferor and such person properly was due to reasonable cause with parent corporation, list the name and
reported the income from the transfer on respect to such portion of the EIN of the parent corporation and file
its timely filed return, or underpayment and the taxpayer acted Form 926 with the parent corporation's
The transfer is considered to be to a in good faith with respect to such portion consolidated return.
foreign corporation solely by reason of of the underpayment. See sections Line 1d. If the answer to line 1d is
Regulations section 1.83-6(d)(1) and 6662(j) and 6664(c) for additional "Yes," and if the asset is transferred in
the fair market value of the property information. an exchange described in section
transferred did not exceed $100,000.
361(a) or (b), attach the following.
When and How To File Specific Instructions A statement that the conditions set
forth in the second sentence of section
Form 926 must be filed with the U.S. Important: All information reported on 367(a)(5) and any regulations under that
transferor's income tax return (or, if Form 926 must be in English. All section have been satisfied.
applicable, exempt organization return) amounts must be stated in U.S. dollars. An explanation of any basis or other
for the tax year that includes the date of If the information required in a given adjustments made pursuant to section
the transfer. section exceeds the space provided 367(a)(5) and any regulations
The Form 926 filed with the IRS within that section, do not write “see thereunder.
attached” in the section and then attach
! must include the additional all of the information on additional Line 2. If a partnership (whether foreign
CAUTION information required in
Regulations sections 1.6038B-1(c) sheets. Instead, complete all entry or domestic) transfers property to a
through (e) and Temporary Regulations spaces in the section and attach the foreign corporation in an exchange
sections 1.6038B-1T(c) and (d). remaining information on additional described in section 367(a)(1), then a
sheets. The additional sheets must U.S. person that is a partner in the
Other Forms That May Be conform with the IRS version of that partnership shall be treated as having
section. transferred a proportionate share of the
Required property in an exchange described in
Persons filing this form may be required Part I—U.S. Transferor section 367(a)(1). A U.S. person's
to file FinCEN Form 114, Report of proportionate share of partnership
Foreign Bank and Financial Accounts Information property shall be determined under the
(FBAR). Identifying number. The identifying rules and principles of sections 701
number of an individual is his or her through 761 and the regulations
A U.S. transferor that is required to social security number (SSN). The thereunder. See Temporary Regulations
enter into a GRA under section 367 to section 1.367(a)-1T(c)(3).

-2- Instructions for Form 926 (Rev. 12-2017)

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Line 2d. For definition of “regularly disposition or liquidation), the reference under the laws of the country of
traded on an established securities ID number used for that transferee incorporation or organization.
market,” see Temporary Regulations foreign corporation cannot be used
Line 8. See section 957(a) to
section 1.367(a)-1T(c)(3)(ii)(D). If the again for another transferee foreign
determine whether the corporation is a
answer to line 2d is “Yes,” the rules of corporation for purposes of Form 926
controlled foreign corporation
Temporary Regulations section reporting.
immediately after the transfer.
1.367(a)-1T(c)(3)(ii)(C) apply. There are some situations that
warrant correlation of a new reference Part III—Information
Part II—Transferee ID number with a previous reference ID
Foreign Corporation number when assigning a new Regarding Transfer of
reference ID number to a transferee Property
Information foreign corporation. For example: Information in Part III is reported in four
Line 4b, Reference ID number. A In the case of a merger or acquisition, sections. Collectively, the four sections
reference ID number is required on a Form 926 filer must use a reference ID capture information with regard to all of
line 4b only in cases where no EIN was number which correlates the previous the properties transferred. The
entered on line 4a for the transferee reference ID number with the new properties covered by each section,
foreign corporation. However, filers are reference ID number assigned to the respectively, are:
permitted to enter both an EIN and a transferee foreign corporation. Cash, stock, and securities
reference ID number. If applicable, enter In the case of an entity classification (“Section A”).
on line 4b the reference ID number election that is made on behalf of a Property qualifying for Active Trade or
(defined below) you have assigned to transferee foreign corporation on Form Business exception under Regulations
the transferee foreign corporation. 8832, Regulations section sections 1.367(a)-2(a)(2)(i) and (ii)
301.6109-1(b)(2)(v) requires the
A “reference ID number” is a number (“Section B”).
transferee foreign corporation to have Property not qualifying for Active
established by or on behalf of the U.S.
an EIN for this election. For the first year Trade or Business exception (other than
transferor identified at the top of page 1
that Form 926 is filed after an entity intangible property subject to section
of the form that is assigned to the
classification election is made on behalf 367(d)) (“Section C”).
transferee foreign corporation with
of the transferee foreign corporation on Intangible property under Regulations
respect to which Form 926 reporting is
Form 8832, the new EIN must be section 1.367(a)-1(d)(5) (“Section D”).
required. These numbers are used to
entered on line 4a and the old reference
uniquely identify the transferee foreign For information that must generally
ID number must be entered on line 4b.
corporation in order to keep track of the be included for a transfer described in
In subsequent years, the Form 926 filer
entity from tax year to tax year. The section 6038B(a)(1)(A), see the
may continue to enter both the EIN and
reference ID number must meet the beginning of the Supplemental Part III
the reference ID number, but must enter
requirements set forth below. Information Required To Be Reported
at least the EIN on line 4a.
section, later.
Note. Because reference ID numbers You must correlate the reference ID
are established by or on behalf of the numbers as follows: New reference ID If additional row(s) are needed to
U.S. person filing Form 926, there is no number [space] Old reference ID enter information for a property category
need to apply to the IRS to request a number. If there is more than one old in a Section in Part III, provide the
reference ID number or for permission reference ID number, you must enter a information in the same format as
to use these numbers. space between each such number. As required for the row in the Section at
indicated above, the length of a given issue in the Supplemental Part III
Note. In general, the reference ID reference ID number is limited to 50 Information Required To Be Reported
number assigned to a transferee foreign characters and each number must be section. For each property category with
corporation on Form 926 has relevance alphanumeric and no special characters such additional row(s), in the Section
only to Form 926 and should not be are permitted. enter “See Supplemental” under column
used with respect to the transferee (b), Description of Property, on the last
foreign corporation on other IRS forms. Note. This correlation requirement row of the property category and enter
applies only to the first year the new in the remaining columns on that last
Requirements. The reference ID reference ID number is used. row the aggregated amounts from the
number must be alphanumeric (defined
below) and no special characters or Line 5, Address. Enter the information corresponding columns on the
spaces are permitted. The length of a in the following order: city, province or additional rows.
given reference ID number is limited to state, and country. Follow the country's
50 characters. practice for entering the postal code, if For distributions covered by section
For these purposes, the term any. Do not abbreviate the country 367(e)(2), see the instructions for
“alphanumeric” means the entry can be name; however, if you file electronically, line 21a, later.
alphabetical, numeric, or any please follow the convention specified. Section A
combination of the two. Line 6. Enter the two-letter country Section A captures information
The same reference ID number must code (from the list at IRS.gov/ regarding cash and certain stock and
be used consistently from tax year to tax countrycodes) of the transferee foreign securities transferred.
year with respect to a given transferee corporation's country of incorporation or
Column (a), Date of transfer. Enter
foreign corporation. If for any reason a organization.
the first date on which title to,
reference ID number falls out of use (for Line 7. List the entity classification (for possession of, or rights to the use of the
example, the transferee foreign example, partnership, corporation, etc.) property passed for U.S. income tax
corporation no longer exists due to of the transferee foreign corporation purposes. See Temporary Regulations

Instructions for Form 926 (Rev. 12-2017) -3-

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section 1.6038B-1T(b)(4) for additional     general rule of section 367(a)(1) will     Column (a), Date of transfer.     Enter 
information.                                apply.                                     the first date on which title to, 
Column (b), Description of property.        Column (a), Date of transfer.     Enter    possession of, or rights to the use of the 
For each stock or security, provide the     the first date on which title to,          property passed for U.S. income tax 
class or type and the name of the           possession of, or rights to the use of the purposes. See Temporary Regulations 
issuing corporation. See the Line 10        property passed for U.S. income tax        section 1.6038B-1T(b)(4) for additional 
instructions in the Supplemental Part III   purposes. See Temporary Regulations        information.
Information Required To Be Reported         section 1.6038B-1T(b)(4) for additional    Column (b), Description of property. 
section, later, for additional reporting    information.                               Provide a description of the property 
requirements.                                                                          transferred. See, in general, final and 
                                            Column (b), Description of property. 
Column (c), Fair market value on            Provide a description of the property      temporary Regulations section 
date of transfer.   Enter the fair market   transferred. See Regulations section       1.6038B-1(c)(4).
value of the property transferred           1.6038B-1(c)(4)(i) for identifying and     Column (c), Fair market value on 
(measured as of the date of transfer).      describing items of property within a      date of transfer. Enter the fair market 
                                            particular property category in 
Column (d), Cost or other basis.                                                       value of the property transferred 
                                            Section B.
Enter the adjusted basis in the property                                               (measured as of the date of transfer).
transferred on the date of the transfer.    Column (c), Fair market value on           Column (d), Cost or other basis. 
See sections 1011 through 1016 for          date of transfer.  Enter the fair market   Enter your adjusted basis in the 
more information for the determination      value of the property transferred          property transferred on the date of the 
of adjusted basis.                          (measured as of the date of transfer).     transfer. See sections 1011 through 
Column (e), Gain recognized on              Column (d), Cost or other basis.           1016 for more information for the 
transfer. Enter the gain recognized on      Enter the adjusted basis in the property   determination of adjusted basis.
the transfer of each property.              transferred on the date of the transfer.   Column (e), Gain recognized on 
                                            See sections 1011 through 1016 for         transfer. Enter the gain recognized 
Note. Do not report in Section A any        more information for the determination     under section 367 and its regulations on 
information for stock or securities         of adjusted basis.                         the transfer of each property. Include in 
transferred that are described in                                                      this column any recapture of 
Regulations sections 1.367(a)-2(a)(2)(i)    Column (e), Gain recognized on 
and (ii). Instead, report the information   transfer. Enter the gain recognized on     depreciation under Regulations section 
for such stock or securities in Section B.  the transfer of each property. Include in  1.367(a)-4. If the transferor transferred 
                                            this column any recapture of               property of a foreign branch with 
Line 9. If cash was the only property       depreciation under Regulations section     previously deducted losses, such losses 
transferred, skip the remainder of Part III 1.367(a)-4. If the transferor transferred  generally must be recaptured by the 
and proceed to Part IV.                     property of a foreign branch with          recognition of gain realized on the 
Line 10. Indicate whether a gain            previously deducted losses, such losses    transfer. See Regulations sections 
recognition agreement was filed             generally must be recaptured by the        1.367(a)-6 and -6T.
pursuant to Regulations section             recognition of gain realized on the        Important.  Do not enter any such 
1.367(a)-8 for a transfer of stock or       transfer, regardless of whether any of     foreign branch loss recapture amount in 
securities. If “Yes,” complete the          the property of the foreign branch         Section C. See the instructions for 
Supplemental Part III Information           satisfies the active trade or business     line 12c below for information on how to 
Required To Be Reported section at the      exception. See Regulations sections        report foreign branch loss recapture.
end of Part III of the form using the       1.367(a)-6 and -6T.
                                                                                       Certain property to be retransferred 
Line 10 instructions under the              Important.   Do not enter any such         (see Regulations section 
Supplemental Part III Information           foreign branch loss recapture in           1.367(a)-2(g)). This property category 
Required To Be Reported section, later.     Section B. See the instructions for        is for property to which Regulations 
Section B                                   line 12c below for information on how to   sections 1.367(a)-2(g)(1)(i) and (ii) 
                                            report foreign branch loss recapture.
Section B captures information                                                         apply, taking into account Regulations 
                                                                                       section 1.367(a)-2(g)(2).
regarding property that is eligible         Note.  Only report information under the 
property under Regulations section          property category “Tangible Property       Property described in Regulations 
1.367(a)-2(a)(2)(i) that is transferred for (not listed under another category)” with  section 1.6038B-1(c)(4)(iv).      This 
use by the foreign corporation in the       respect to tangible property for which     category captures information regarding 
active conduct of a trade or business       information is not reportable under        property that is eligible property under 
outside of the United States under          another property category of Section B.    Regulations section 1.367(a)-2(b) taking 
Regulations section 1.367(a)-2(a)(2)(ii).                                              into account the application of 
Generally, if the property is used in the   Section C                                  Regulations section 1.367(a)-2(c) 
active conduct of a foreign trade or        Section C captures information with        (certain property that does not 
business under Regulations sections         respect to property to which the active    constitute eligible property) that was 
1.367(a)-2(d) through (h), and the U.S.     trade or business exception does not       transferred to the foreign corporation 
transferor complies with the reporting      apply (other than intangible property      but not for use in the active conduct of a 
requirements of section 6038B and its       subject to section 367(d)). Section        trade or business outside the United 
regulations for the transfer of such        367(a)(1) applies to the transfer of       States. Do not report in this category 
property, the active trade or business      property reported in Section C.            information regarding property which 
exception (at section 367(a)(3)) to the                                                would be reported under the category 
                                                                                       “Certain property to be retransferred 

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(see Regulations section                    column (e), and Part III, Section C,           Part III Information Required To Be 
1.367(a)-2(g)).”                            column (e).                                    Reported section.
Property described in Regulations           Section D                                      Column (e), Cost or other basis. 
section 1.6038B-1(c)(4)(vii).     This      Section D captures information                 Enter the adjusted basis in the property 
category includes any property (a) other    regarding transfers of intangible              transferred on the date of the transfer. 
than property described in Regulations      property as defined under Regulations          See sections 1011 through 1016 for 
section 1.367(a)-2(c); (b) that cannot      section 1.367(a)-1(d)(5) and subject to        more information for the determination 
qualify under Regulations section           section 367(d). Therefore, the category        of adjusted basis.
1.367(a)-2(a)(2) regardless of its use in   “Property described in section 936(h)(3)       Column (f), Income inclusion for 
the active conduct of a trade or            (B)” does not include property described       year of transfer.  A U.S. person who 
business outside of the United States;      in section 1221(a)(3) or a working             transfers property subject to section 
and (c) that is not subject to the rules of interest in oil and gas property.              367(d) is treated as having sold such 
section 367(d) under Regulations 
section 1.367(a)-1(b)(5) (treatment of      Column (a), Date of transfer.     Enter        property in exchange for payments 
certain property as subject to section      the first date on which title to,              which are contingent upon the 
367(d)). Each item of property must be      possession of, or rights to the use of the     productivity, use or disposition of such 
separately identified. This category        property passed for U.S. income tax            property and receiving amounts 
would include, for example, information     purposes. See Temporary Regulations            annually over the useful life of the 
regarding:                                  section 1.6038B-1T(b)(4) for additional        property that represent an appropriate 
property described in section 1221(a)       information.                                   arm’s length charge for use of the 
                                                                                           property. For each intangible 
(3),                                        Column (b), Description of property.           transferred, enter the amount included 
a working interest in oil and gas not       Provide a separate description for each        in income under section 367(d) on the 
reported in Section B, and                  identified intangible, including each          income tax return for the year of the 
property for which the transferor           identified (i) patent, invention, formula,     transfer. If the amount reported in 
could have applied section 367(d)           process, design, pattern, or know-how;         column (d) as the arm’s length price for 
pursuant to Regulations section             (ii) copyright, literary, musical, or artistic intangible property is an allocation of an 
1.367(a)-1(b)(5) but did not.               composition; (iii) trademark, trade            amount determined based on an 
                                            name, or brand name; (iv) franchise, 
Note. Do not report in Section C any                                                       aggregate analysis, enter the inclusion 
                                            license, or contract; and (v) method, 
information for stock or securities                                                        amount in column (f) that corresponds 
                                            program, system, procedure, campaign, 
transferred. Instead, report this                                                          to the allocated amount reported in 
                                            survey, study, forecast, estimate, 
information in Section A or Section B.                                                     column (d). If no amount is so included, 
                                            customer list, or technical data. If an        enter “0.” The amount entered in column 
Note. Do not report in Section C any        identified intangible is similar to any of     (f) should reflect the application of 
information for intangible property         the intangibles described in the               Regulations section 1.367(d)-1(c)(3)(ii), 
subject to section 367(d). Instead,         preceding sentence (either individually        if properly chosen. See line 15c and 
report this information in Section D.       or collectively), provide a brief              related instructions, below. See also the 
                                            explanation.                                   Line 15c instructions under the 
Line 11. If the answer to the question                                                     Supplemental Part III Information 
on line 11 is "Yes," complete the           Column (c), Useful life. Enter the 
Supplemental Part III Information           useful life for each intangible. The useful    Required To Be Reported section, later, 
Required To Be Reported section at the      life of intangible property is defined         for additional information that must be 
end of Part III of the form using the       under Regulations section 1.367(d)-1(c)        reported.
Line 11 instructions under the              (3)(i). If the useful life of intangible       Line 13a. For purposes of answering 
Supplemental Part III Information           property is indefinite, enter “indefinite.”    line 13a, “property described in section 
Required To Be Reported section, later.     Regulations section 1.367(d)-1(c)(3)(ii)       936(h)(3)(B)” does not include property 
                                            is not relevant to the determination of        described in section 1221(a)(3) or a 
Lines 12a-e. See Final and Temporary        the useful life entered in column (c).         working interest in oil and gas property. 
Regulations sections 1.367(a)-2 through                                                    See Regulations section 1.367(a)-1(d)
1.367(a)-7 for instances in which a         Column (d), Arm’s length price on 
transferor must recognize income on the     date of transfer. Generally, if a U.S.         (5).
transfer of property. If the answer to      person transfers intangible property           Line 13b. If the amount requested on 
line 12b, 12c, or 12e is “Yes,” complete    subject to section 367(d), such person         line 13b is zero, enter “0.” The amount 
the Supplemental Part III Information       shall, over the useful life of the property,   entered on line 13b should reflect the 
Required To Be Reported section at the      annually include in gross income an            application of Regulations section 
end of Part III of the form using the       amount that represents an appropriate          1.367(d)-1(c)(3)(ii), if properly chosen. 
Line 12b, 12c, or 12e instructions under    arm’s length charge for use of the             See line 15c and related instructions. 
the Supplemental Part III Information       property. The appropriate charge is            Include in the amount entered on 
Required To Be Reported section, later.     determined in accordance with the              line 13b gain recognized as a result of 
                                            provisions of section 482 and                  making an election to treat a transfer of 
Line 12c.  If the answer to line 12c is     regulations thereunder. See Temporary          certain intangible property as a sale 
“Yes,” enter on line 12d the total amount   Regulations section 1.367(d)-1T(c)(1).         under Temporary Regulations section 
of the foreign branch loss recapture        For each intangible reported in                1.367(d)-1T(g)(2). See also the 
under Regulations sections 1.367(a)-6       Section D, provide the arm’s length            Line 13b instructions under the 
and -6T. Do not enter this amount in any    price on the date of transfer. See             Supplemental Part III Information 
Section of Part III of the form. See the    instructions below for information that        Required To Be Reported section, later, 
instructions for Part III, Section B,       must be included in the Supplemental 

Instructions for Form 926 (Rev. 12-2017)                      -5-

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for additional information that must be      part, including a chronology of the         2. The number of months the 
reported.                                    transfers involved and an identification    property was in use;
                                             of the other parties to the transaction to 
Line 14a. Under Regulations section                                                      3. The fair market value of the 
                                             the extent known. See Temporary 
1.367(a)-1(b)(5), a U.S. transferor may                                                  property;
                                             Regulations section 1.6038B-1T(c)(2)
apply section 367(d) to certain property                                                 4. A schedule of the depreciation 
                                             (ii).
that otherwise would be subject to                                                       deduction with respect to the property; 
section 367(a).                              Provide a description of the                and
                                             consideration received by the U.S. 
Line 14b. If the amount requested on         person making the transfer. The             5. A calculation of the amount of 
line 14b is zero, enter “0.” The amount      description should identify:                depreciation to be recaptured.
entered on line 14b should reflect the       The property comprising the                 See Regulations section 
application of Regulations section           consideration and the total fair market     1.6038B-1(c)(4)(iii).
1.367(d)-1(c)(3)(ii), if properly chosen. If value of the items, and
the answer to line 14b is “Yes,” see the     In the case of stock or securities, the     Line 12c. If the answer to line 12c is 
Line 14b instructions under the              class, type, amount, and characteristics    “Yes”:
Supplemental Part III Information            of the interest received.                   Describe the foreign branch the 
Required To Be Reported section, later,                                                  property of which is transferred. See 
for additional information that must be      See Temporary Regulations sections          Temporary Regulations section 
reported.                                    1.6038B-1T(c)(3) and 1.6038B-1T(d)(1)       1.6038B-1T(c)(5)(i).
                                             (iii).                                      Describe the property of the foreign 
Line 14d. If the amount requested on 
line 14d is zero, enter “0.” See the         Information to be reported.  When           branch, including its adjusted basis and 
Line 14d instructions under the              providing any information in the            fair market value. See Temporary 
Supplemental Part III Information            Supplemental Part III Information           Regulations section 1.6038B-1T(c)(5)
Required To Be Reported section, later,      Required To Be Reported section,            (ii).
for additional information that must be      indicate the Section, column, row, and      Set forth a detailed calculation of the 
reported.                                    line for which the information is being     sum of the losses incurred by the 
                                             provided.                                   foreign branch before the transfer and a 
Line 15c. In cases where the useful life                                                 detailed calculation of any reduction of 
of the transferred intangible property is    Additional Section rows.     If additional  such losses. See Temporary 
indefinite or reasonably anticipated to      rows are needed to enter information for    Regulations section 1.6038B-1T(c)(5)
exceed 20 years, a taxpayer may,             a property category on a Section in Part    (iii).
instead of including amounts in income       III, provide the information in the same    Set forth a statement of the character 
during the entire useful life of the         format as required for the row on the       of the gain required to be recognized. 
intangible property, choose in the year      Section at issue in the Supplemental        See Temporary Regulations section 
of transfer to increase annual inclusions    Part III Information Required To Be         1.6038B-1T(c)(5)(iv).
during the 20-year period beginning with     Reported section. See the beginning of      List any intangible property subject to 
the first year in which the U.S. transferor  the Part III instructions, earlier, for how section 367(d) the transfer of which 
takes into account income pursuant to        to incorporate the information from the     gives rise to foreign branch recapture 
section 367(d), to reflect amounts that,     additional rows.                            under Regulations sections 1.367(a)-6 
but for the choice to increase annual        Line 10. If the answer to the line 10       and -6T and provide a calculation of the 
inclusions, would have been required to      question is “Yes,” for any stock or         gain required to be recognized. See 
be included following the end of the         securities transferred, provide a general   Regulations section 1.6038B-1(d)(1)
20-year period. To apply this 20-year        description of the corporation issuing      (vii).
inclusion period, a taxpayer must attach     the stock or securities. See Regulations    Line 12e. If the answer to line 12e is 
a statement titled “Application of the       section 1.6038B-1(c)(4)(ii).                “Yes”:
20-year Inclusion Period to Section 
367(d) Transfer” to a timely filed original  Line 11. If the answer to the line 11       Describe any property transferred for 
federal income tax return (including         question is “Yes,” provide a general        which gain is required to be recognized 
extensions) for the year of the transfer.    description of the business conducted       under a provision of Regulations 
See Regulations section 1.367(d)-1(c)        (or to be conducted) by the transferee,     sections 1.367(a)-2 through -7 other 
(3)(ii). If the answer to line 15c is “Yes,” including:                                  than the provisions at issue on lines 
see the Line 15c and Line 15d                The location of the business;               12a-d and
instructions below for information that      The number of its employees; and            For each such property described, 
must be included in the Supplemental         The nature of the business.                 provide the specific regulation provision 
Part III Information Required To Be          See Regulations section                     under which gain is required to be 
Reported section at the end of Part III of   1.6038B-1(c)(4)(i).                         recognized.
the form.                                    Line 12b.  If the answer to line 12b is     Section D, column (d). Provide a brief 
Supplemental Part III                        “Yes”:                                      explanation of how the arm’s length 
                                             Describe any property that is subject       price on the date of transfer for each 
Information Required To Be                                                               intangible was determined.
                                             to depreciation recapture under 
Reported                                     Regulations section 1.367(a)-4(a). See      Section D, column (f). If an amount 
Information to be generally reported         Regulations section 1.6038B-1(c)(4)(iii).   greater than zero was included, provide 
for a transfer described in section          Specify with respect to each such           a brief explanation of how the income 
6038B(a)(1)(A): Provide a general            property:                                   inclusion for the year of the transfer was 
description of the transfer, and any         1. The relevant recapture provision;        determined.
wider transaction of which it forms a 

                                                              -6-                        Instructions for Form 926 (Rev. 12-2017)

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Line 13b. Provide and explain the anticipated income or cost reduction gain recognized. See Regulations
calculation of the annual deemed attributable to the property’s (or section 1.987-5.
payment. See Temporary Regulations properties’) use beyond the 20-year
Line 20. If this transfer resulted from a
section 1.6038B-1T(d)(1)(v). If period was estimated. See Regulations
change in entity classification (a
applicable, provide a calculation of the section 1.6038B-1(d)(1)(iv).
deemed transfer resulting from a
gain required to be recognized on the classification change on Form 8832,
transfer of intangible property with Part IV— Additional Entity Classification Election, or a
respect to which an election has been Information Regarding termination of a section 1504(d)
made to treat the transfer as a sale election), check the “Yes” box. If the
Transfer of Property
under Temporary Regulations section transfer was an actual transfer of
1.367(d)-1T(g)(2). See Temporary Line 18. List the type of nonrecognition property to a foreign corporation, check
Regulations section 1.6038B-1T(d)(1) transaction that gave rise to the the “No” box.
(vi). reporting obligation (for example,
section 332, 351, 354, 356, or 361). Line 21a. Check the “Yes” box on
Line 14b. Provide and explain the line 21a if the domestic corporation
calculation of the annual deemed Line 19a. If gain recognition was (domestic liquidating corporation) made
payment. See Temporary Regulations required with respect to any transfer a distribution of property in complete
section 1.6038B-1T(d)(1)(v). reported in Part III under section 904(f) liquidation under section 332 to a
(3), attach a statement identifying the
Line 14d. Provide a description of the foreign corporation that meets the stock
transfer and the amount of gain
property and the amount of gain, if any, ownership requirements of section
recognized.
reported under section 367(a)(1) with 332(b) with respect to stock in the
respect to the property. Line 19b. If gain recognition was domestic liquidating corporation.
required with respect to any transfer If the answer to line 21a is "Yes,"
Line 15c. If the answer to the line 15c
reported in Part III under section 904(f) provide the following information in the
question is “Yes,” describe the property
(5)(F), attach a statement identifying the Supplemental Part III Information
for which the transferor chose to apply
transfer and the amount of gain Required To Be Reported section.
the 20-year inclusion period. See
recognized. Preface this supplemental information
Regulations sections 1.6038B-1(d)(1)
(iv) and 1.367(d)-1(c)(3)(ii). Line 19c. If recapture was required on the form with the heading “Section
Explain how the increase to the with respect to any transfer reported in 367(e)(2) Information.”
deemed payment rate was calculated Part III under section 1503(d) (dual A description, including the adjusted
for property transferred. See consolidated loss), attach a statement tax basis and fair market value, of all
Regulations sections 1.6038B-1(d)(1) identifying the transfer and the amount property distributed by the distributing
(iv) and 1.367(d)-1(c)(3)(ii). The of recapture. See section 1503(d) and corporation (regardless of whether the
explanation should include how the the regulations thereunder. distribution of the property qualifies for
nonrecognition treatment).
deemed payment rate was calculated Line 19d. If exchange gain recognition An identification of the items of
for each period of the useful life of the was required with respect to any property for which nonrecognition
intangible property and the 20-year transfer reported in Part III under section treatment is claimed under Regulations
inclusion period. 987, attach a statement identifying the section 1.367(e)-2(b)(2)(ii) or (iii), as
Line 15d. If the answer to the question transfer and the amount of exchange applicable.
on line 15c is “Yes,” explain how the

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Instructions for Form 926 (Rev. 12-2017) -7-

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