DHL Corporation and Subsidiaries - Page 39

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          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 to             



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