Title 26 — Internal Revenue CodeRelease 119-73not60

§1059A Limitation on Taxpayer’s Basis or Inventory Cost in Property Imported From Related Persons

Title 26 › Subtitle Subtitle A— Income Taxes › Chapter 1— NORMAL TAXES AND SURTAXES › Subchapter O— Gain or Loss on Disposition of Property › Part IV— SPECIAL RULES › § 1059A

Last updated Apr 5, 2026|Official source

Summary

Stops a buyer from treating the same costs twice when related parties import goods into the United States. It applies when the buyer (who is related under section 482) includes certain costs in the buyer’s basis or inventory cost and those same costs are also used to compute the customs value for duties. Customs value = the value used to work out customs or other import duties. Import = bringing goods in or taking them out of a warehouse for use, unless rules say otherwise.

Full Legal Text

Title 26, §1059A

Internal Revenue Code — Source: USLM XML via OLRC

(a)If any property is imported into the United States in a transaction (directly or indirectly) between related persons (within the meaning of section 482), the amount of any costs—

(1)which are taken into account in computing the basis or inventory cost of such property by the purchaser, and

(2)which are also taken into account in computing the customs value of such property,

(b)For purposes of this section—

(1)The term “customs value” means the value taken into account for purposes of determining the amount of any customs duties or any other duties which may be imposed on the importation of any property.

(2)Except as provided in regulations, the term “import” means the entering, or withdrawal from warehouse, for consumption.

Legislative History

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Pub. L. 99–514, title XII, § 1248(c), Oct. 22, 1986, 100 Stat. 2584, provided that: “The

Amendments

made by this section [enacting this section] shall apply to transactions entered into after March 18, 1986.”

Reference

Citations & Metadata

Citation

26 U.S.C. § 1059A

Title 26 — Internal Revenue Code

Last Updated

Apr 5, 2026

Release point: 119-73not60