106 T.C. No. 1
UNITED STATES TAX COURT
THE COCA-COLA COMPANY, AND INCLUDIBLE SUBSIDIARIES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 299-94. Filed January 4, 1996.
P filed a motion for partial summary judgment
relating to the computation of combined taxable income
under sec. 936(h)(5)(C)(ii), I.R.C., with respect to
syrup and soft-drink concentrate produced by P's sec.
936, I.R.C., subsidiary, Caribbean Refrescos, Inc.
1. Held: Sec. 1.936-6(b)(1), Q&A-12, Income Tax
Regs., governs the computation of combined taxable
income with respect to sales of component concentrate
to unrelated third parties.
2. Held, further, sec. 1.936-6(b)(1), Q&A-12,
Income Tax Regs., requires U.S. affiliate expenses to
be allocated and apportioned to the component
concentrate by applying the production cost ratio to
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