26 CFR § 1.267A-1 - Disallowance of certain interest and royalty deductions.
---
identifier: "/us/cfr/t26/s1.267A-1"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "26 CFR § 1.267A-1 - Disallowance of certain interest and royalty deductions."
title_number: 26
title_name: "Internal Revenue"
section_number: "1.267A-1"
section_name: "Disallowance of certain interest and royalty deductions."
chapter_name: "INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY"
subchapter_number: "A"
subchapter_name: "INCOME TAX"
part_number: "1"
part_name: "INCOME TAXES"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "26 U.S.C. 7805, unless otherwise noted."
regulatory_source: "T.D. 6500, 25 FR 11402, Nov. 26, 1960; 25 FR 14021, Dec. 21, 1960; T.D. 9989, 89 FR 17606, Mar. 11, 2024, unless otherwise noted."
cfr_part: "1"
---
# 1.267A-1 Disallowance of certain interest and royalty deductions.
(a) *Scope.* This section and §§ 1.267A-2 through 1.267A-5 provide rules regarding when a deduction for any interest or royalty paid or accrued is disallowed under section 267A. Section 1.267A-2 describes hybrid and branch arrangements. Section 1.267A-3 provides rules for determining income inclusions and provides that certain amounts are not amounts for which a deduction is disallowed. Section 1.267A-4 provides an imported mismatch rule. Section 1.267A-5 sets forth definitions and special rules that apply for purposes of section 267A. Section 1.267A-6 illustrates the application of section 267A through examples. Section 1.267A-7 provides applicability dates.
(b) *Disallowance of deduction.* This paragraph (b) sets forth the exclusive circumstances in which a deduction is disallowed under section 267A. Except as provided in paragraph (c) of this section, a specified party's deduction for any interest or royalty paid or accrued (the amount paid or accrued with respect to the specified party, a *specified payment*) is disallowed under section 267A to the extent that the specified payment is described in this paragraph (b). *See also* § 1.267A-5(b)(5) (treating structured payments as interest paid or accrued for purposes of section 267A and the regulations in this part under section 267A). A specified payment is described in this paragraph (b) to the extent that it is—
(1) A disqualified hybrid amount, as described in § 1.267A-2 (hybrid and branch arrangements);
(2) A disqualified imported mismatch amount, as described in § 1.267A-4 (payments offset by a hybrid deduction); or
(3) A specified payment for which the requirements of the anti-avoidance rule of § 1.267A-5(b)(6) are satisfied.
(c) *De minimis exception.* Paragraph (b) of this section does not apply to a specified party for a taxable year in which the sum of the specified party's specified payments that but for this paragraph (c) would be described in paragraph (b) of this section is less than $50,000. For purposes of this paragraph (c), specified parties that are related (within the meaning of § 1.267A-5(a)(14)) are treated as a single specified party.
[T.D. 9896, 85 FR 19836, Apr. 8, 2020]