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In pertinent part, section 1.482-1(b), Income Tax Regs.,
provides: “The purpose of section 482 is to place a controlled
taxpayer on a tax parity with an uncontrolled taxpayer, by
determining, according to the standard of an uncontrolled
taxpayer, the true taxable income from the property and business
of a controlled taxpayer.”
In pertinent part, section 1.482-1(a)(6), Income Tax Regs.,
provides:
The term "true taxable income" means, * * * the taxable
income (or, as the case may be, any item or element
affecting taxable income) which would have resulted to
the controlled taxpayer, had it in the conduct of its
affairs (or, as the case may be, in the particular
contract, transaction, arrangement, or other act) dealt
with the other member or members of the group at arm's
length. * * *
In pertinent part, section 1.482-2(b)(1), Income Tax Regs.,
provides:
Where one member of a group of controlled entities
performs marketing, managerial, administrative,
technical, or other services for the benefit of * * *
another member of the group * * * at a charge which is
not equal to an arm's length charge as defined in
paragraph (b)(3) of this section, the district director
may make appropriate allocations to reflect an arm's
length charge for such services.
Paragraph (b)(3) of section 1.482-2, Income Tax Regs., provides:
Arm’s length charge. For the purpose of this
paragraph an arm’s length charge for services rendered
shall be the amount which was charged or would have
been charged for the same or similar services in
independent transactions with or between unrelated
parties under similar circumstances considering all
relevant facts. However, except in the case of
services which are an integral part of the business
activity of either the member rendering the services or
the member receiving the benefit of the services * * *
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Last modified: May 25, 2011