- 126 - transferred it to another member of the controlled group. Petitioners rely on the following language in the regulation: In the absence of a bona fide cost-sharing arrangement (as defined in * * * [sec. 1.482-2(d)(4)]), where one member of a group of related entities undertakes the development of intangible property as a developer within the meaning of * * * [sec. 1.482- 2(d)(1)(ii)(c)], no allocation with respect to such development activity shall be made * * * until such time as any property developed, or any interest therein, is or is deemed to be transferred, sold, assigned, loaned, or otherwise made available in any manner by the developer to a related entity in a transfer subject to the rules of this paragraph. Sec. 1.482-2(d)(1)(ii)(a), Income Tax Regs. Petitioners contend that the application of this regulation requires the determination of what intangible property was developed, which entity was the developer within the meaning of section 1.482-2(d)(1)(ii)(c), Income Tax Regs., and whether the developer transferred the intangible property to a related entity. Petitioners argue that DHLI was the “developer” of the DHL trademark outside of the United States and, accordingly, that portion should not be allocated or reallocated to petitioners. Petitioners note that the application of these regulations is not dependent upon ownership. Respondent argues that petitioners’ proposed application of the so-called Developer-Assister Regulation is factually and procedurally incorrect in these cases. Respondent contends that the facts here show that DHL was the developer of the trademark and that there was no cost-sharing agreement between DHL and DHLI. Respondent points out that DHL licensed the trademark toPage: Previous 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 Next
Last modified: May 25, 2011