113 T.C. No. 13
UNITED STATES TAX COURT
THE LIMITED, INC., AND CONSOLIDATED SUBSIDIARIES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 26618-95. Filed September 7, 1999.
P’s subsidiary, D, a domestic corporation, is a
credit card bank, issuing private label credit cards to
customers of P. F1 is a controlled foreign corporation
with respect to P. F2 is a foreign subsidiary of F1.
F1 funded F2, which purchased certificates of deposit
(CDs) from D.
Held: The CDs are U.S. property within the
meaning of sec. 956(b)(1), I.R.C., and not deposits
with persons carrying on the banking business within
the meaning of sec. 956(b)(2)(A), I.R.C. Held,
further, the CDs are attributed to F1 pursuant to sec.
1.956-1T(b)(4), Temporary Income Tax Regs., 53 Fed.
Reg. 22163, 22165 (June 14, 1988). Held, further, P
must include the increase of investment in U.S.
property in gross income pursuant to sec. 951(a)(1)(B),
I.R.C.
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