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hearsay that is not otherwise admissible pursuant to rule 805 of
the Federal Rules of Evidence. The paragraph at issue in that
memorandum, viz., the third narrative paragraph that begins
"Regarding salaries", relates D.L. McGinnis' notes from a conver-
sation that he had with another individual concerning the availa-
bility of training grants from the IDA for B&L Ireland's contact
lens operations. We find that that paragraph constitutes hearsay
within hearsay not otherwise admissible pursuant to rule 805 of
the Federal Rules of Evidence.
In conclusion, the two newspaper articles and the third
paragraph of the McGinnis memorandum are inadmissible hearsay.
We unconditionally admit into evidence the remaining stipulated
facts and exhibits to which the parties objected and make them
part of the record in these cases.
Foreign Base Company Sales Income--Section 954(d)(1)
Under subpart F (sections 951 through 964), a U.S.
shareholder of a CFC must include in gross income a pro rata
share of certain classes of income of that CFC including, inter
alia, foreign base company sales income.31 Section 954(d) pro
31 Sec. 951(a)(1) provides that a U.S. shareholder of a CFC must
include in gross income, inter alia, a pro rata share of the sub-
part F income of that CFC for the year ended during such share-
holder's tax year. Sec. 952(a) defines the term "subpart F in-
come" to include "foreign base company income". Sec. 952(a)(2).
Sec. 954(a) defines "foreign base company income" to include
(continued...)
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