- 89 -
section 1.864-2(c)(2)(i), Income Tax Regs.17 Additionally, LTD
had a fixed place of business in the United States, viz, the San
Antonio office, through which such transactions were effected.
See supra p. 81.
We conclude that none of the transactions in LTD's financial
services business qualify for the exclusion pursuant to section
864(b)(2)(A)(ii). The transactions that LTD undertook in its own
name were not of the type contemplated by the statute. LTD did
not purchase and sell securities for its own account for the
purpose of investment or speculation within the meaning of
section 1.864-2(c)(2)(iv)(a), Income Tax Regs. The transactions
in LTD’s own name were part of its regular, continuous, and
extensive business of purchasing certificates of deposit with its
clients’ funds, as attorney in fact for the clients, with a view
to making commissions or other profits from such transactions.
The office in San Antonio was instrumental to the conduct of that
business. Based on the foregoing, we hold that LTD did not
effect the transactions in question for its own account within
the meaning of section 864(b)(2)(A)(ii). Insofar as LTD may have
purchased any of the certificates of deposit for its own account,
we conclude that LTD was "a dealer in stocks or securities"
within the meaning of section 1.864-2(c)(2)(iv), Income Tax
17
Id.
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