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spreads earned by LTD on Pace deposits should constitute income
from sources outside the United States, none of which is
effectively connected to a U.S. trade or business. In our prior
opinion, we held that LTD's Pace investments income "represented
compensation for services rendered in San Antonio in arranging
the Pace investments." As petitioners' argument presumes that
the Pace investments income is interest income, as opposed to
service income that we found it to be, we find that petitioners'
argument has no merit. Accordingly, we do not reconsider our
holding with respect to the Pace investments income.
D. Section 482 Allocations
In their motion, petitioners ask the Court to reconsider the
section 482 allocations as to four types of income. We note that
LTD paid INC an annual fee for services rendered to LTD.
Petitioners, however, did not establish the amounts that INC
earned for each individual investment product. Consequently, in
our prior opinion, for purposes of section 482, we compared LTD's
annual payment to INC with the sum of the arm's-length charges
calculated for the services INC rendered to LTD. Turning to
petitioners' motion, we address the first two types of income
together.
1. Currency Fund and FEIM Fund Fees
Petitioners contend that, as to the Currency Fund and the
FEIM Fund, the Court's methodology has the consequence of
allocating to INC amounts which exceed the fees or commissions
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