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trained the Florida personnel and provided technical and
logistical support but that the structure was set by the Florida
operation, which sent people to California. Regarding a license
agreement, the notes state: “License agreement from foreign
corp. to NV-Florida for UK Co.?”
Forsyth wanted to determine a method to make payments to the
Spanish investors while incurring a minimum amount of U.S. tax.
Forsyth developed a plan that he outlined in a letter to
Santandreu dated June 4, 1986. Forsyth recommended that the
Spanish investors set up a domestic corporation to operate the
Florida and California castles and utilize a three-tier corporate
operating structure. Specifically, he recommended that MTNV
cease operating in the United States, transfer its assets to a
Dutch or other nationality subsidiary, and then have the
subsidiary transfer its assets to a new operating company
incorporated in Florida.
Before Forsyth finalized his plan for corporate
restructuring, he was waiting for a final ratification of an
income tax treaty between the United States and The Netherlands.
Forsyth suggested that using a Dutch company as the intermediate
tier would have advantages. Forsyth recommended the use of
section 351 to transfer the assets from the Netherlands Antilles
corporation to the intermediate-tier Dutch corporation and then
from the Dutch corporation to the new domestic operating company.
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