- 9 -
(B) such lessee is obligated to lease
the building under an agreement to lease
entered into before September 26, 1985, and
such property is provided for such building,
and
(C) such buildings are to serve as world
headquarters of the lessee and its
affiliates.
For purposes of this paragraph, a corporation is an
affiliate of another corporation if both corporations
are members of a controlled group of corporations
within the meaning of section 1563(a) of the Internal
Revenue Code of 1954 without regard to section
1563(b)(2) of such Code. Such lessee shall include a
securities firm that meets the requirements of
subparagraph (A), except the lessee is obligated to
lease the building under a lease entered into on June
18, 1986.
This exception is commonly referred to as the world headquarters
rule. The requirements of the world headquarters rule are
cumulative. Payless must prove that it meets all the
requirements of subparagraphs (A), (B), and (C) in order to
qualify for an investment tax credit under this transitional
rule. See Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115
(1933).
Respondent argues that Payless fails to meet the
requirements of the world headquarters rule because: (1) Payless
did not lease the entire building at Two Pershing Square, and (2)
Payless’ headquarters at Two Pershing Square was not a “world
headquarters”.
TRA section 204(a)(7) contains no explicit requirement that
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011