- 6 -
The agreement also provided that CV would produce, upon demand by
CVI, a list of the qualified export receivables in which CVI had
an interest, including the identity of the account debtor, the
amount of each receivable, and the date on which it arose. CV
was required to bill and collect all payments on the qualified
export receivables in which CVI had an interest on CVI's behalf
and, unless requested to remit the proceeds to CVI, to substitute
an undivided interest in additional receivables for those
discharged.
Using the commissions paid it by CV, CVI, pursuant to the
master receivables purchase agreement, periodically purchased at
a discount interests in CV's qualified export receivables that
were qualified export assets within the meaning of section
993(b). During its 1981 taxable year, CV entered into the
following sales of qualified export receivables to CVI at a
discount under the master receivables purchase agreement:
Date of Sale Receivables Face Amount
Oct. 1, 1981 $23,345,288
Oct. 15, 1981 1,874,000
Dec. 1, 1981 4,028,369
Under the terms of the sales, CV was obligated to pay to CVI all
proceeds collected with respect to CVI’s interest in the
qualified export receivables on September 30, 1982.
During 1982, CV made an election to use the installment
method to report its income with respect to domestic and foreign
sales. Because CV believed that further purchases of qualified
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011