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include the income attributable to their respective portions as
if earned by them directly. Sec. 1.671-2(c), Income Tax Regs.
Section 468B(g) does not warrant a different result. The
statute and regulations issued thereunder do not prescribe rules
for identifying the person currently taxable on the income earned
by the PLRF. However, the statute plainly requires that this
income be taxed currently and does not purport to override any
existing rules that may apply to tax the income of the PLRF
currently. Nor does the statute purport to suspend the
application of such rules pending issuance of implementing
regulations. The TAMRA committee reports contemplate that if an
escrow arrangement creates a trust relationship, the rules of
subchapter J will control. See supra p. 57. Taxation of the
PLRF as a grantor trust is therefore consistent with the
statutory mandate and the intention of Congress.
3. Administrator's Fees and Insurance Premiums
The Dealerships’ Federal income tax returns for the years at
issue do not reflect the portions of the VSC purchase price that
the Dealerships promptly remitted to the Administrator in payment
of the Administrator's Fees and excess loss insurance premiums.
Petitioners' defense of this treatment rests squarely on the
matching principle: "The clear reflection of the Dealership’s
net income requires that the recognition of income and related
expenses attributable to these two items occur concurrently."
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