§ 1.863-7T - Allocation of income attributable to certain notional principal contracts under section 863(a) (temporary).

(a) Scope—(1) Introduction. This section provides rules relating to the source and, in certain cases, the character of notional principal contract income. However, this section does not apply to income from a section 988 transaction within the meaning of section 988 and the regulations thereunder, relating to the treatment of certain nonfunctional currency transactions. Further, this section does not apply to a dividend equivalent as defined in section 871(m) or §1.871-15. Notional principal contract income is income attributable to a notional principal contract as defined in §1.446-3(c). An agreement between a taxpayer and a qualified business unit (as defined in section 989(a)) of the taxpayer, or among qualified business units of the same taxpayer, is not a notional principal contract, because a taxpayer cannot enter into a contract with itself.

(a)(2) through (e) [Reserved] For further guidance, see §1.863-7(a)(2) through (e).

(f) Effective/applicability date. This section applies to payments made on or after January 23, 2012.

(g) Expiration date. This section expires January 16, 2015.

[T.D. 9572, 77 FR 3109, Jan. 23, 2012]