Section 987 Equity and Basis Pool Method (Notice 2026-17)

These calculations assume that the owner of the QBU is a US person with the US dollar as its functional currency and that the owner has duly elected to use the equity and basis pool method.

Yellow backgrounds denote local currency amounts and green backgrounds denote US dollar amounts.

Basic Inputs

Beg. of the Year Equity Pool (local currency)

Beg. of the Year Basis Pool (US dollars)

Prior Year Realized 987 Gain/Loss (US dollars)

Pre-Tax Net Income (local currency)

End of the Year Liab.s (local currency)

Yearly Average Exchange Rate

End of the Year
Spot Rate

Contributions

Tax Basis (US dollars)

Spot Rate

Distributions

Tax Basis (local currency)

Spot Rate

Section 987 Calculations

1. Pre-tax net income (USD):

2. Contributions (LC):

3. Equity pool at the end of the year (LC):

4. Contributions (USD):

5. Distributions (USD):

6. Basis pool at the end of the year (USD):

7. Net unrealized Sec. 987 gain/loss (USD):

8. Remittance (LC):

9. Remittance proportion:

10. Realized Sec. 987 gain/loss (USD):

Review Notice 2026-17 for details. These simplified calculations do not work in all circumstances.