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The words of the 1984 temporary regulation which make the
rules for "deferred intercompany transaction" of section 1.1502-
13, Income Tax Regs., applicable to deferral under section 267(f)
militate against use of the "binding commitment test" in the
controlled group situation. Pursuant to that regulation, the
controlled group relationship is tested immediately after the
transaction, not when the binding commitment is entered into.
Application of the "binding commitment test" depends on the
controlled group relationship before the transaction and
therefore would conflict with the 1984 temporary regulation.
Finally, incorporation of the "binding commitment test" into
section 267(f) jurisprudence would also be contrary to the
current regulations. The final regulations, section 1.267(f)-1,
Income Tax Regs., adopt the "immediately after" test of the
consolidated return regulations that respondent contends were not
part of the 1984 temporary regulation at issue in this case.
Sections 1.267(f)-1(b)(1) and 1.1502-13(b)(1)(i), Income Tax
Regs., provide:
� 1.267(f)-1. Controlled groups.--* * *
* * * * * * *
(b) Definitions and operating rules. The definitions
in � 1.1502-13(b) and the operating rules of � 1.1502-13(j)
apply under this section with appropriate adjustments,
including the following:
(1) Intercompany sale. An intercompany sale is a
sale, exchange, or other transfer of property between
members of a controlled group, if it would be an
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