Page 221 - International Taxation IRS Training Guides

Repeal of Active Trade

or Business Exception

 If a US person transfers property used in the active
a trade or business to a foreign corporation in
conduct of

TCJA, there is no
a nonrecognition transaction, after

longer an exception to gain recognition due to the

property being used in an active trade or business

of active trade or business exception of IRC
(repeal
367(a)(3))

 Due to a provision eliminated in this repeal, TCJA

enacted a new foreign branch loss
recapture rule (IRC

91)

 Effective for
transfers made after Dec. 31, 2017

76