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further contends that there was no cost-sharing arrangement
between DHL and DHLI. Finally, respondent contends that
petitioners failed to show that DHLI either developed or assisted
in developing the intangible (trademark) because it has not been
shown that the advertising expenditures incurred by DHLI were
more than what would have been incurred at arm’s length; i.e.,
allocation from DHL to DHLI is not appropriate.
Petitioners counter that respondent may not choose either to
“invoke” the section 482 regulations and make an allocation based
on the developer/assister standard, or to ignore those
regulations and make an allocation “pursuant to” the parties’
licensor/licensee relationship. Petitioners rely on the language
of section 1.482-2(d)(1)(ii)(a), Income Tax Regs., that “no
allocation * * * shall be made” with respect to a transfer of
intangible property unless either (1) there is a “bona fide cost
sharing arrangement” as defined in section 1.482-2(d)(4), Income
Tax Regs., or (2) the intangible has been transferred by the
“developer” within the meaning of section 1.482-2(d)(1)(ii)(c),
Income Tax Regs. Petitioners contend that respondent has denied
the existence of a bona fide cost-sharing arrangement in these
cases and that, therefore, any section 482 allocation must be
based on the developer/assister standard. Finally, petitioners
contend that respondent, under the regulations, may make an
allocation (reduction of value) for an “assistance” provided by
DHLI if DHLI is not considered the “developer” of the intangible.
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