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verifying the availability of LTD’s funds and then transferring
such funds (usually by wire) to the borrowers, who were usually
clients. We view the second requirement as providing a less
stringent test than the first requirement because it provides
only that the office must perform "significant services incident"
to the transaction in issue. In the instant case, when the
office transferred the funds (usually by wire) to the borrowers
per their direction, we conclude that it effected the loans,
which was the performance of "significant services incident" to
such loans. Additionally, the office did not merely conduct the
four types of activities that do not cause an office to be
considered a material factor in the realization of income, gain,
or loss pursuant to section 1.864-6(b)(2)(ii)(a), Income Tax
Regs.; i.e., the San Antonio office did not merely (1) collect
the interest, (2) exercise general supervision over the
activities of the persons collecting the interest, (3) perform
merely clerical functions incident to the loan, or (4) exercise
final approval over the execution of the loan. Consequently, we
hold that the San Antonio office is a material factor in the
production of LTD’s loan interest within the meaning of section
864(c)(5)(B).
The third test provides that "the income, gain, or loss
which shall be attributable to an office or other fixed place of
business within the United States shall be the income, gain, or
loss properly allocable thereto". Sec. 864(c)(5)(C). As the San
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