- 98 - 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.Page: Previous 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 Next
Last modified: May 25, 2011