- 2 -
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.
OPINION
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
120(b).
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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Last modified: May 25, 2011