§ 989. Other definitions and special rules
(a)
Qualified business unit
For purposes of this subpart, the term “qualified business unit” means any separate and clearly identified unit of a trade or business of a taxpayer which maintains separate books and records.
(b)
Appropriate exchange rate
Except as provided in regulations, for purposes of this subpart, the term “appropriate exchange rate” means—
(1)
in the case of an actual distribution of earnings and profits, the spot rate on the date such distribution is included in income,
(2)
in the case of an actual or deemed sale or exchange of stock in a foreign corporation treated as a dividend under section
1248, the spot rate on the date the deemed dividend is included in income,
(3)
in the case of any amounts included in income under section
951
(a)(1)(A) or
1293
(a), the average exchange rate for the taxable year of the foreign corporation, or
(c)
Regulations
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subpart, including regulations—
(1)
setting forth procedures to be followed by taxpayers with qualified business units using a net worth method of accounting before the enactment of this subpart,
(2)
limiting the recognition of foreign currency loss on certain remittances from qualified business units,
(3)
providing for the recharacterization of interest and principal payments with respect to obligations denominated in certain hyperinflationary currencies,