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transactions with persons situated within or without the United
States. Accordingly, we conclude that LTD performed the
activities required for a foreign corporation to be considered "a
banking, financing, or similar business in the United States"
within the meaning of section 1.864-4(c)(5)(i), Income Tax Regs.
In addition to the listed activities, however, section
1.864-4(c)(5)(i), Income Tax Regs., requires that the foreign
corporation "at some time during the taxable year" be "engaged in
business in the United States". Petitioners argue that certain
trading activities performed by LTD are excludable from the
determination of whether LTD is engaged in "trade or business
within the United States" pursuant to section 864(b).
Petitioners argue that pursuant to section 864(b)(2)(A)(i) and
(ii), LTD’s trading in stocks or securities are excluded from the
determination of whether LTD is engaged in "trade or business
within the United States". The activity of "Trading in stocks or
securities through a resident broker, commission agent,
custodian, or other independent agent" is excluded from the
definition of "trade or business within the United States". Sec.
864(b)(2)(A)(i). The exclusion applies, however, "only if, at no
time during the taxable year, the taxpayer has an office or other
fixed place of business in the United States through which or by
12(...continued)
real estate investment trust, creating offshore corporations and
trusts, purchasing U.S. Treasury bills, and trading in gold and
silver futures.
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