- 11 - transactions income (other than the two items of income from the Guadalajara office) was from sources outside the United States. Petitioners bear the burden of proving that the income derived from sources outside the United States, Rule 142(a), and have not met that burden. Accordingly, we do not reconsider our holding that "the remaining currency exchange transactions income is treated as income from sources within the United States." Petitioners also argue that the currency exchange transactions income should not be taxed as effectively connected income pursuant to section 864(c) because INC's role in the transactions was only as a bookkeeper, not as "a material factor in the realization" of LTD's income. Petitioners contend that the act of contacting institutions for exchange rates is mistakenly attributed to INC when in fact that was the role of the promoter in Mexico. Contrary to petitioners' argument, we believe that our prior opinion correctly attributes to INC the act of contacting institutions for exchange rates. In our prior opinion, we concluded that the activities of LTD's trade or business relating to LTD's U.S. source income included "contacting institutions for exchange rates and depositing or withdrawing dollars or pesos." INC was involved in making those contacts on behalf of LTD. As we stated in our prior opinion, we were addressing the U.S. source income of both types of currency exchange transactions that LTD performed: currency swaps and currency transactions.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011