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retention of a 15-year free domestic use of the DHL trademark
results in capital gain income; (5) whether petitioners, under
section 482, had additional income from forgone royalties;
(6) whether petitioners, under section 482, had additional income
attributable to imbalance and transfer fees; (7) whether
petitioners, under section 482, had additional income from
network fees; (8) whether petitioners correctly computed their
net operating loss carryover deductions for 1990 and 1991;2 (9)
whether petitioners are entitled to setoffs in any year in which
additional section 482 income is finally determined; and (10)
whether petitioners are liable for penalties under section
6662(a) and/or section 6662(h) for taxable years 1990, 1991,
and/or 1992.
FINDINGS OF FACT
I. Background
Petitioners are DHL Corp. (DHL or petitioner), formed in
1969 in California, and affiliated subsidiaries. At the time of
the filing of the petitions in these cases, petitioners’
principal place of business was Redwood City, California.
Petitioner was formed by Adrian Dalsey (Dalsey), Larry Hillblom
(Hillblom), and Robert Lynn, and the first initial of each last
name was used to form the “DHL” name. Lynn transferred his
2 Within the context of this issue, petitioners argued that
for purposes of sec. 382 net operating loss limitations, the
ownership of DHL changed on Dec. 7, 1990. On brief, respondent
conceded this point.
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