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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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