Chicago Mercantile Exchange - Page 8




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          shareholder.  We conclude that petitioner’s members were not its            
          affiliates for purposes of TRA section 204(a)(7).2                          
               Even if petitioner’s members were its affiliates for                   
          purposes of TRA section 204(a)(7), petitioner would have failed             
          the second requirement; to wit, that the leased building serve as           
          the world headquarters of it and each of its affiliates.                    
          Although the CME Center arguably served as petitioner’s “world              
          headquarters” in the sense that petitioner had offices and                  
          employees located throughout the world, see Payless Cashways v.             
          Commissioner, supra, petitioner has not established that the CME            
          Center also served as the world headquarters of its approximately           
          2,700 members.  Approximately 1/4 of those members are                      
          corporations and the remainder are individuals.  Under the                  
          holding of the Court of Appeals for the Seventh Circuit in United           
          States v. Kjellstrom, supra, a corporation does not qualify for             
          the world headquarters exception merely by virtue of the fact               
          that the corporation is owned by individuals and has more than              
          one office.                                                                 



               2 Nor do we believe that petitioner was an affiliate of                
          either CCP or PMT for purposes of sec. 204(a)(7) of the TRA, Pub.           
          L. 99-514, 100 Stat. 2146.  Petitioner looks solely to its 10-              
          percent ownership interest in each partnership and concludes from           
          this bare fact that it and the partnerships are affiliates.  We             
          disagree.  None of the shareholders in United States v.                     
          Kjellstrom, supra, were considered by the Court of Appeals for              
          the Seventh Circuit to be Wisco’s affiliate, and the interest of            
          at least one of those shareholders was at least 16.6 percent.               





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