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all expenses allocable and apportionable to the
integrated product; i.e., bottle and can soft drink.
3. Held further, sec. 1.936-6(b)(1), Q&A-12,
Income Tax Regs., requires U.S. affiliate expenses
allocable and apportionable to the integrated product,
i.e., bottle and can soft drink, to be determined under
sec. 1.861-8, Income Tax Regs., as described in sec.
1.936-(6)(b)(1), Q&A-1, Income Tax Regs.
4. Held, further, P may net interest income against
interest expense in determining the amount of the
interest deduction to be allocated and apportioned in
computing combined taxable income under sec. 936,
I.R.C., and sec. 1.861-8(e)(2), Income Tax Regs.
Bowater Inc. v. Commissioner, 101 T.C. 207 (1993).
Charles W. Hall, William S. Lee, Nancy T. Bowen, William
P. McClure, Herman B. Bouma, and Gregory J. Ossi, for
petitioner.
Beth Williams, H. Steven New, and David P. Fuller, for
respondent.
OPINION
WRIGHT, Judge: This matter is before the Court on
petitioner's motion for partial summary judgment filed under Rule
121.1 This case was heard at a motions session held on February
1Unless otherwise indicated, all Rule references are to the
Tax Court Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code in effect during the
years in issue.
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