[Code of Federal Regulations]
[Title 26, Volume 10]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.956-2T]

[Page 358]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.956-2T  Definition of United States Property (temporary).

    (a)-(c) [Reserved]
    (d)(1) [Reserved]
    (2) Obligation defined--(i) Rule. For purposes of Sec. 1.956-2 of 
the regulations, the term ``obligation'' includes any bond, note, 
debenture, certificate, bill receivable, account receivable, note 
receivable, open account, or other indebtedness, whether or not issued 
at a discount and whether or not bearing interest, except that such term 
shall not include:
    (A) Any indebtedness arising out of the involuntary conversion of 
property which is not United States property within the meaning of 
paragraph (a)(1) of Sec. 1.956-2, or
    (B) Any obligation of a United States person (as defined in section 
957(c)) arising in connection with the provision of services by a 
controlled foreign corporation to the United States person if the amount 
of such obligation outstanding at any time during the taxable year of 
the controlled foreign corporation does not exceed an amount which would 
be ordinary and necessary to carry on the trade or business of the 
controlled foreign corporation and the United States person if they were 
unrelated. The amount of such obligations shall be considered to be 
ordinary and necessary to the extent of such receivables that are paid 
within 60 days.

See Sec. 1.956-2(b)(1)(v) for the exclusion from United States property 
of obligations arising in connection with the sale or processing of 
property where such obligations are ordinary and necessary as to amount.
    (ii) Effective date. This section is effective June 14, 1988, with 
respect to investments made on or after June 14, 1988.

[T.D. 8209, 53 FR 22171, June 14, 1988]