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determined that his gain from the stock sale was $3,925,000
rather than $4,805,864.
Section 1248 was intended to tax foreign accumulated income
at ordinary, as opposed to capital gain, rates. Teller v.
Commissioner, T.C. Memo. 1992-402. Section 1248(a) provides that
gain from the sale of stock in a foreign corporation is to be
treated as a dividend (to the extent of earnings and profits
attributable to such stock which were accumulated while the
corporation was a "controlled foreign corporation") if the stock
is sold by a United States person who owned 10 percent or more of
all classes of stock entitled to vote during the 5-year period
ending on the date of the sale or exchange when the foreign
corporation was a controlled foreign corporation.
Although petitioner contends otherwise, we think the
requirements necessary to invoke section 1248 are present here.
For purposes of section 1248 the term "United States person"
includes a U.S. citizen, section 1.1248-1(a), Income Tax Regs.;
section 7701(a)(30), which petitioner has been since 1953. A
"controlled foreign corporation" is any foreign corporation in
which more than 50 percent of the total voting stock is owned or
considered owned by a U.S. shareholder on any day during the
foreign corporation's taxable year. Sec. 957(a).
Diesel Power was an Iranian corporation. Petitioner
acquired 100 percent of Diesel Power's stock for nothing in 1958
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