- 12 -
LTD's currency swap income consisted of commissions from Bank of
America and United States Trust for arranging the currency swaps,
and LTD paid INC to render services to LTD's clients on behalf of
LTD. At trial, Jose Zollino, treasurer and a director of INC,
testified that, at INC's office in San Antonio, Pablo Cerrilla,
who was in charge of operations for INC, registered "all" of the
foreign exchange transactions, which included currency swaps.
Additionally, at trial, George Dooley, INC's controller for
approximately 4 years, testified that, at INC's office in San
Antonio, Jose de Abiega worked on foreign exchange transactions,
which included currency swaps. As LTD's currency swap income
consisted of commissions from Bank of America and United States
Trust and as INC handled the currency swaps for LTD's clients, we
are satisfied that the record in the instant case shows that INC
contacted Bank of America and United States Trust to obtain
exchange rates and to arrange the currency swaps. Accordingly,
based on the record, we conclude that the activities of LTD's
trade or business relating to its U.S. source currency exchange
transactions income included, inter alia, contacting institutions
for exchange rates and that INC was engaged in making those
contacts on LTD's behalf.
As to LTD’s U.S. source currency exchange transactions
income, we held in our prior opinion that the activities of LTD's
trade or business were "a material factor in the realization of
the income" within the meaning of section 864(c)(2)(B).
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011