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in the United States for such accounts, during each of the years
in issue, can be characterized as quantitatively substantial.
Qualitatively, LTD performed substantial services in the
United States. Directly and through its agent INC, LTD provided
investment management services and marketed investment products.
The purpose for which LTD was established was to provide access
to non-Mexican financial markets, and LTD conducted such business
primarily in the United States. We therefore conclude that LTD’s
activities in the United States during each of the years in issue
can be characterized as qualitatively substantial.
In sum, we conclude that LTD "engaged in * * * substantial,
regular, or continuous ordinary business activity in the United
States." Spermacet Whaling & Shipping Co. S/A v. Commissioner,
supra at 634. We find that LTD’s activities in the United
States, conducted directly or through agents, included:
Receiving client funds, monitoring interest rates, effecting
trades, collecting and disbursing dividends and interest,
maintaining customer account information, and valuing portfolios.
Accordingly, we conclude that, during the years in issue, LTD was
"engaged in business in the United States" within the meaning of
section 1.864-4(c)(5)(i), Income Tax Regs. Consequently, we hold
that LTD was "engaged in the active conduct of a banking,
financing, or similar business in the United States" pursuant to
section 1.864-4(c)(5)(i), Income Tax Regs. A fortiori, we hold
that LTD was engaged in "trade or business within the United
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