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(iii) If the powers which would ordinarily be
exercised by the board of directors of a domestic
corporation are exercised with respect to such
foreign corporation by a person whom such
shareholders have the power to elect, appoint, or
replace.
Burndy-US does not meet the requirements of section 1.957-
1(b)(1)(i), Income Tax Regs., because Burndy-US lacked the power
to elect, appoint, or replace a majority of the board of
directors. See discussion pp. 32-38.
Burndy-US does not meet the requirements of section 1.957-
1(b)(1)(ii), Income Tax Regs., because it lacked the power to
break tie votes and could not unilaterally exercise powers
ordinarily exercised by a domestic board of directors. See
discussion pp. 32-38.
Burndy-US does not meet the requirements of section 1.957-
1(b)(1)(iii), Income Tax Regs., because the veto powers and
supermajority requirements prevented Burndy-US from exercising
powers over Burndy-Japan ordinarily exercised by a domestic board
of directors. See discussion pp. 27-32.
We conclude that Burndy-US did not own more than 50 percent
of the voting power of Burndy-Japan in 1992.
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