American Air Liquide, Inc. and Subsidiaries - Page 2

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                    Held: The royalty income is passive income for the                
               purpose of calculating P’s foreign tax credit. Neither                 
               alone nor in combination did the “reserved” paragraph                  
               in sec. 1.904-5(i)(3), Income Tax Regs., Article 24(3)                 
               of the U.S.-France Treaty, or written statements of                    
               Treasury officials constitute an exception to sec.                     
               904(d) entitling P to characterize the royalty income                  
               as general limitation income.                                          
               E.A. Dominianni and Edmund S. Cohen, for petitioner.                   
               Steven R. Winningham, Lydia A. Branche, and Rebecca I.                 
          Rosenberg, for respondent.                                                  

               LARO, Judge:  Respondent determined deficiencies in                    
          petitioner’s Federal income taxes of $320,351, $1,083,746, and              
          $942,456 for 1989, 1990, and 1991,1 respectively.                           
               This matter is before the Court on cross-motions for                   
          judgment on the pleadings under Rule 120(a).2  In support of its            
          motion, petitioner attached exhibits to its response.  These                
          exhibits require us to consider matters outside the pleadings,              
          and as a consequence we have recharacterized the motions as                 
          cross-motions for summary judgment under Rule 121.  See Rule                

               1 In the petition, petitioner concedes that $160,196,                  
          $333,746, and $222,456 of the amounts determined as deficiencies            
          in 1989, 1990, and 1991, respectively, are not in dispute.                  
               2 Rule references are to the Tax Court Rules of Practice and           
          Procedure.  Unless otherwise indicated, section references and              
          references to the Code are to the Internal Revenue Code in effect           
          for the years in issue.                                                     

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