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of the income". Sec. 864(c)(2)(B). We have held, supra p. 98,
that LTD was engaged in "trade or business within the United
States" pursuant to section 864(b) during its taxable years in
issue. The activities of LTD’s trade or business relating to the
U.S. source currency transactions income included contacting
institutions for exchange rates and depositing or withdrawing
dollars or pesos. We conclude that such activities of LTD’s
trade or business were "a material factor in the realization of
the income" within the meaning of section 864(c)(2)(B). We have
given due regard to the question of whether such income was
accounted for through such trade or business, and we find LTD's
U.S. source currency transactions income to have been accounted
for through LTD's trade or business. Sec. 864(c)(2).
Consequently, we hold that LTD's U.S. source currency
transactions income is effectively connected income pursuant to
section 1.864-4(c)(5)(vi)(b), Income Tax Regs., and section
864(c)(2)(B).
e. Sales Commissions and Fees
We examine all of LTD's income from commissions and fees
together, except for the foreign source TVA commissions, because
of the similarity of the services provided by LTD in earning such
commissions and fees. Petitioners and respondent provide similar
arguments for all of the commissions and fees, which are
summarized below.
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