Читать книгу International Taxation - Adnan Islam - Страница 72

G is a U.S. corporation with the U.S. dollar as its functional currency. On January 1, 20X0, G enters into a contract to purchase a paper-manufacturing machine for 10,000,000 British pounds for delivery on January 1, 20X2. On January 1, 20X2, when G exchanges £10,000,000 (which G purchased for $12,000,000) for the machine, the fair market value of the machine is £17,000,000. On January 1, 20X2, the spot exchange rate is £1 = $1.50. The transaction is treated as an exchange of £10,000,000 for $15,000,000 and the purchase of the machine for $15,000,000. Accordingly, in computing G’s exchange gain of $3,000,000 on the disposition of the £10,000,000, the amount realized is $15,000,000. G’s basis in the machine is $15,000,000. No gain is recognized on the bargain purchase of the machine (Treasury Regulation 1.988-2(a)(2)(ii)(C), example).