The Limited, Inc., and Consolidated Subsidiaries - Page 20

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          concludes that (1) MFE, a controlled foreign corporation,                   
          increased its earnings invested in U.S. property and                        
          (2) petitioner, the sole U.S. shareholder of MFE, must include              
          $174,127,665 in gross income pursuant to section 951(a)(1)(B).              
               Respondent has numerous arguments why the MFE N.V. CDs are             
          not deposits with persons carrying on the banking business within           
          the meaning of section 956(b)(2)(A) (sometimes, section 956                 
          deposits).  Principally, respondent argues that (1) to be in the            
          banking business for purposes of section 956(c)(2)(A), an                   
          institution must first be a “bank” within the meaning of section            
          581 (definition of bank for purposes of rules of general                    
          application to banking institutions), and (2) since WFNNB does no           
          more than operate a private label credit card business, its                 
          activities are too narrow to put it into “the banking business”.            
          Respondent also argues that the MFE N.V. CDs did not constitute             
          deposits as that term is used in section 956(b)(2)(A).                      
               Alternatively, respondent argues that, because, in                     
          substance, the MFE NV CDs are the repatriation of earnings of a             
          controlled foreign corporation, they should be treated as such no           
          matter what steps petitioner took to color them as something                
               B.  Petitioner’s Arguments                                             
               Petitioner denies that MFE N.V. was created, organized, or             
          funded to avoid the application of section 956.  Moreover,                  

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