Section 987 Final Regulations: A Practical Approach for Partnerships

This article originally appeared in the May 2025 issue of The Tax Adviser.

On December 10, 2024, Treasury and the IRS issued final and proposed regulations under Section 987. The Section 987 regulations provide guidance for determining taxable income or loss with respect to a qualified business unit that uses a functional currency different from its owner. 

While this article references the final regulations, it is aimed at providing a practical analysis of how to apply the proper reasonable methods allowed under the final regulations to partnerships and S corporations. 

BDO’s Doug Chestnut, Tahira Nagda, and Ivan Rudd provide details in the full article in The Tax Adviser.