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deposit”. Each also provided: “This Time Deposit shall renew
automatically for a like term unless and until notice of
withdrawal is presented at the Bank within * * * seven calendar
days after the maturity date". On January 28, 1993, WFNNB
transferred the $174.9 million received from MFE N.V. to Limited
Services to reduce the balance outstanding under a line of credit
extended to WFNNB by Limited Services.
WFNNB is a wholly owned subsidiary of petitioner, and,
therefore, the reduction of WFNNB’s line of credit balance to
Limited Service directly benefited petitioner. As we shall
explain in the next section of this report, we find that
respondent did not abuse his discretion in attributing the MFE
N.V. CDs to MFE. We therefore view the purchase of the MFE N.V.
CDs as a repatriation of the earnings of MFE. Because that
repatriation made the earnings of MFE (a controlled foreign
corporation) available for use by its only U.S. shareholder
(petitioner), we find that the repatriation was substantially the
equivalent of a dividend being paid by MFE to petitioner. The
purchase of the MFE N.V. CDs was an investment in U.S. property.
The exception for section 956 deposits is unavailable.
F. Section 1.956-1T(b)(4), Temporary Income Tax Regs.
Section 1.956-1T(b)(4), Temporary Income Tax Regs., 53 Fed.
Reg. 22165 (June 14, 1988), empowers respondent to attribute to
MFE the MFE N.V. CDs if one of the principal purposes for
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