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interests. For U.S. income tax purposes, petitioner was treated
no differently than any other U.S. taxpayer.
Petitioner argues that the Temporary Regulation
discriminates against U.S. subsidiaries owned by foreign
purchasing members without effectively connected income, because
“losses sustained by such subsidiaries are uniformly denied”
under the Temporary Regulation, in the absence of competent
authority intervention. Petitioner argues that this “requirement
of competent authority intervention, entirely avoided by a U.S.
corporation with a U.S. parent,” is more burdensome than
requirements imposed on U.S.-owned corporations, in contravention
of Article 24 of the U.S.-U.K. treaty.
Petitioner’s argument is without merit. The operation of
neither section 267(f) nor the Temporary Regulation is
conditioned on the country of incorporation of the taxpayer’s
parent, but rather on the taxpayer’s selling property at a loss
to members of the same controlled group, without reference to
where those related parties may be incorporated. A U.S.
corporation with a U.S. parent would face the same burdens and
requirements as petitioner, all other things being equal, if it
sold property at a loss to a United Kingdom corporation that was
a member of the same controlled group. Conversely, a U.S.
corporation with a United Kingdom parent might sell property to a
U.S. affiliate without implicating the competent authority
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