Title 26 — Internal Revenue CodeRelease 119-73
§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
Summary
When goods are imported into the United States in a deal between related companies, the costs the buyer can count toward the goods' tax basis or inventory cost are limited by the costs counted in the goods' customs value — the value used to figure import duties. "Import" means entering goods, or withdrawing them from a warehouse, for consumption.
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 6, 2026
Release point: 119-73