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Revenue Code section 482 and Treasury regulation
section 1.482(d), it is determined that an arm’s-length
charge for management services performed by Hyatt-Hong
Kong, Hyatt-Singapore and Hyatt-Panama equals
$73,200.00 per hotel managed in 1976 through 1978.
* * *
The management fees adjustments generally represent all of the
net income of the named subsidiaries in excess of respondent’s
determined per-hotel allowance, less the amount already
determined as trade name royalty. The February 28, 1995, notice
for AIC’s 1979 through 1983 taxable years contained the same
explanations for these adjustments as the November 18, 1994,
notice, except that the per-hotel arm’s-length charges determined
by respondent were as follows:
Year Amount
1979 $75,000
1980 87,500
1981 100,000
1982 62,000
1983 62,000
The number of hotels respondent used to compute the fee
adjustments were as follows:
Year HHK HS HP
1976 6 2 1
1977 6 2 1
1978 7 2 1
1979 9 3 1
1980 20 3 1
1981 28 2 1
1982 14 2 1
1983 17 2 1
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