T.C. Memo. 2000-388
UNITED STATES TAX COURT
SEAGATE TECHNOLOGY, INC., SUCCESSOR IN INTEREST TO SEAGATE
PERIPHERALS, INC., f.k.a. CONNER PERIPHERALS, INC., Petitioner
v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 15086-98. Filed December 22, 2000.
P, a domestic corporation, entered into a cost-
sharing agreement with its foreign subsidiaries in
connection with certain intangibles that were
transferred to the subsidiaries. R determined that P
should have included in the cost-sharing pool the cost
of stock options for P’s employees who performed the
research and development regarding the intangibles.
Where there is a bona fide cost-sharing arrangement, R
may make allocations only “to reflect each
participant’s arm’s-length share of the cost of the
risks of developing the property.” Sec. 1.482-2(d)(4),
Income Tax Regs. P contends that R is limited to
making allocations only where R is aware of actual
arm’s-length circumstances where the cost of stock
options is shared. P also contends that for purposes
of summary judgment, R’s reliance on an expert’s
opinion is not a “fact” for purposes of deciding
whether the parties have a genuine dispute about a
material fact.
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