The Limited, Inc., and Consolidated Subsidiaries - Page 1

                                   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),                

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