# 26 U.S.C. § 6038B: Notice of certain transfers to foreign persons Source: OLRC release point 119-134 . Cite pinpoints as 26 U.S.C. § 6038B(a)(1). ## § 6038B(a) In general Each United States person who— **§ 6038B(a)(1)** transfers property to— **§ 6038B(a)(1)(A)** a foreign corporation in an exchange described in section 332, 351, 354, 355, 356, or 361, or **§ 6038B(a)(1)(B)** a foreign partnership in a contribution described in section 721 or in any other contribution described in regulations prescribed by the Secretary, or **§ 6038B(a)(2)** makes a distribution described in section 336 to a person who is not a United States person, shall furnish to the Secretary, at such time and in such manner as the Secretary shall by regulations prescribe, such information with respect to such exchange or distribution as the Secretary may require in such regulations. ## § 6038B(b) Exceptions for certain transfers to foreign partnerships; special rule **§ 6038B(b)(1) Exceptions.** Subsection (a)(1)(B) shall apply to a transfer by a United States person to a foreign partnership only if— **§ 6038B(b)(1)(A)** the United States person holds (immediately after the transfer) directly or indirectly at least a 10-percent interest (as defined in section 6046A(d)) in the partnership, or **§ 6038B(b)(1)(B)** the value of the property transferred (when added to the value of the property transferred by such person or any related person to such partnership or a related partnership during the 12-month period ending on the date of the transfer) exceeds $100,000. For purposes of the preceding sentence, the value of any transferred property is its fair market value at the time of its transfer. **§ 6038B(b)(2) Special rule.** If by reason of an adjustment under section 482 or otherwise, a contribution described in subsection (a)(1) is deemed to have been made, such contribution shall be treated for purposes of this section as having been made not earlier than the date specified by the Secretary. ## § 6038B(c) Penalty for failure to furnish information **§ 6038B(c)(1) In general.** If any United States person fails to furnish the information described in subsection (a) at the time and in the manner required by regulations, such person shall pay a penalty equal to 10 percent of the fair market value of the property at the time of the exchange (and, in the case of a contribution described in subsection (a)(1)(B), such person shall recognize gain as if the contributed property had been sold for such value at the time of such contribution). **§ 6038B(c)(2) Reasonable cause exception.** Paragraph (1) shall not apply to any failure if the United States person shows such failure is due to reasonable cause and not to willful neglect. **§ 6038B(c)(3) Limit on penalty.** The penalty under paragraph (1) with respect to any exchange shall not exceed $100,000 unless the failure with respect to such exchange was due to intentional disregard. ## Regulations - [Treas. Reg. § 1.6038B-1](/26/reg/1.6038B-1.md): Reporting of certain transfers to foreign corporations. (interprets § 6038B) - [Treas. Reg. § 1.6038B-1T](/26/reg/1.6038B-1T.md): Reporting of certain transactions to foreign corporations (temporary). (interprets § 6038B) - [Treas. Reg. § 1.6038B-2](/26/reg/1.6038B-2.md): Reporting of certain transfers to foreign partnerships. (interprets § 6038B) ## Forms named in the regulations - [Form 926](https://www.irs.gov/pub/irs-pdf/f926.pdf) - [Form 8865](https://www.irs.gov/pub/irs-pdf/f8865.pdf) - [Form 1065](https://www.irs.gov/pub/irs-pdf/f1065.pdf) - [Form 990](https://www.irs.gov/pub/irs-pdf/f990.pdf) ## Final rules - [89 FR 82160](https://www.federalregister.gov/documents/2024/10/10/2024-23132/section-367d-rules-for-certain-repatriations-of-intangible-property) (2024): Section 367(d) Rules for Certain Repatriations of Intangible Property - [85 FR 3833](https://www.federalregister.gov/documents/2020/01/23/2020-00383/transfers-of-certain-property-by-us-persons-to-partnerships-with-related-foreign-partners) (2020): Transfers of Certain Property by U.S. Persons to Partnerships With Related Foreign Partners - [82 FR 7582](https://www.federalregister.gov/documents/2017/01/19/2017-01049/transfers-of-certain-property-by-us-persons-to-partnerships-with-related-foreign-partners) (2017): Transfers of Certain Property by U.S. Persons to Partnerships With Related Foreign Partners - [81 FR 91012](https://www.federalregister.gov/documents/2016/12/16/2016-29791/treatment-of-certain-transfers-of-property-to-foreign-corporations) (2016): Treatment of Certain Transfers of Property to Foreign Corporations - [81 FR 15159](https://www.federalregister.gov/documents/2016/03/22/2016-06404/indirect-stock-transfers-and-the-coordination-rule-exceptions-transfers-of-stock-or-securities-in) (2016): Indirect Stock Transfers and the Coordination Rule Exceptions; Transfers of Stock or Securities in Outbound Asset Reorganizations - [79 FR 68763](https://www.federalregister.gov/documents/2014/11/19/2014-27365/failure-to-file-gain-recognition-agreements-or-satisfy-other-reporting-obligations) (2014): Failure To File Gain Recognition Agreements or Satisfy Other Reporting Obligations - [78 FR 17024](https://www.federalregister.gov/documents/2013/03/19/2013-05700/certain-outbound-property-transfers-by-domestic-corporations-certain-stock-distributions-by-domestic) (2013): Certain Outbound Property Transfers by Domestic Corporations; Certain Stock Distributions by Domestic Corporations - [78 FR 17053](https://www.federalregister.gov/documents/2013/03/19/2013-05696/indirect-stock-transfers-and-the-coordination-rule-exceptions-transfers-of-stock-or-securities-in) (2013): Indirect Stock Transfers and the Coordination Rule Exceptions; Transfers of Stock or Securities in Outbound Asset Reorganizations - [71 FR 71040](https://www.federalregister.gov/documents/2006/12/08/E6-20734/guidance-necessary-to-facilitate-business-electronic-filing) (2006): Guidance Necessary to Facilitate Business Electronic Filing - [71 FR 4276](https://www.federalregister.gov/documents/2006/01/26/06-587/revision-of-income-tax-regulations-under-sections-367-884-and-6038b-dealing-with-statutory-mergers) (2006): Revision of Income Tax Regulations Under Sections 367, 884, and 6038B Dealing With Statutory Mergers or Consolidations Under Section 368(a)(1)(A) Involving One or More Foreign Corporations, and Guidance Necessary To Facilitate Business Electronic Filing Under Section 6038B - [68 FR 70701](https://www.federalregister.gov/documents/2003/12/19/03-31238/guidance-necessary-to-facilitate-business-electronic-filing) (2003): Guidance Necessary To Facilitate Business Electronic Filing - [64 FR 72545](https://www.federalregister.gov/documents/1999/12/28/99-32695/information-reporting-with-respect-to-certain-foreign-partnerships-and-certain-foreign-corporations) (1999): Information Reporting With Respect to Certain Foreign Partnerships and Certain Foreign Corporations - [64 FR 43072](https://www.federalregister.gov/documents/1999/08/09/99-20092/treatment-of-distributions-to-foreign-persons-under-sections-367e1-and-367e2) (1999): Treatment of Distributions to Foreign Persons Under Sections 367(e)(1) and 367(e)(2) - [64 FR 5713](https://www.federalregister.gov/documents/1999/02/05/99-2798/notice-of-certain-transfers-to-foreign-partnerships-and-foreign-corporations) (1999): Notice of Certain Transfers to Foreign Partnerships and Foreign Corporations - [63 FR 33550](https://www.federalregister.gov/documents/1998/06/19/98-15454/certain-transfers-of-stock-or-securities-by-us-persons-to-foreign-corporations-and-related-reporting) (1998): Certain Transfers of Stock or Securities by U.S. Persons to Foreign Corporations and Related Reporting Requirements ## Connections Cites: § 332 Complete liquidations of subsidiaries; § 336 Gain or loss recognized on property distributed in complete liquidation; § 482 Allocation of income and deductions among taxpayers; § 721 Nonrecognition of gain or loss on contribution; § 6046A Returns as to interests in foreign partnerships Cited by: none ## Amendments - 1984-07-18: [Pub. L. 98-369](/26/act/98-369.md), 98 Stat. 664 - 1997-08-05: [Pub. L. 105-34](/26/act/105-34.md), 111 Stat. 984 - 1998-07-22: [Pub. L. 105-206](/26/act/105-206.md), 112 Stat. 818 - 2005-12-21: [Pub. L. 109-135](/26/act/109-135.md), 119 Stat. 2636