The Limited, Inc., and Consolidated Subsidiaries - Page 36

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          purchase of the MFE N.V. CDs amounts to the use of the earnings             
          of a controlled corporation by a U.S. shareholder, we believe               
          that such purchase must be regarded as an increase of earnings              
          invested in U.S. property (and not a section 956 deposit).                  
               On January 28, 1993, MFE N.V. purchased the (eight) MFE N.V.           
          CDs from WFNNB for $174.9 million,  Each CD was for a term of               
          1 year, showed an annual interest rate of 3.1 percent, and                  
          provided that it was a “nonnegotiable and nontransferable time              
          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                  

          exception as accomplishing the same result with respect to                  
          obligations in the form of deposits with a domestic corporation             
          carrying on the banking business.  The sec. 956(b)(2)(A)                    
          exception, however, applies to "deposits with persons carrying on           
          the banking business", whereas the sec. 956(b)(2)(F) exception              
          applies to "obligations of a domestic corporation."  A person               
          carrying on the banking business need not be a corporation.  See,           
          e.g., Mass. Gen. Laws Ann. ch. 167, sec. 1 (1997) defining "Bank"           
          to include "any individuals, association, partnership or                    
          corporation * * * doing a banking business in the commonwealth";            
          see also N.D. Cent. Code sec. 6-01-02 (1995) defining the terms             
          "banking association" and "state banking association" to include            
          "limited liability companies, partnerships, firms, or                       
          associations whose business in whole or in part consists of the             
          taking of money on deposit".  Although our interpretation of the            
          sec. 956 deposits exception narrows its scope, we conclude that             
          it cannot be interpreted to permit deposits by controlled foreign           
          corporations with a related person carrying on the banking                  
          business to go untaxed and still remain consistent with the clear           
          overall legislative intent to tax investments in related U.S.               

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