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required or legally obligated to do, it is also relevant what
management of a corporation reasonably believes constitutes the
reasonable needs of the business. See, e.g., Ivan Allen Co. v.
United States, 422 U.S. 617, 624-628 (1975).
We also note that in Turner v. Commissioner, supra, the
activities of a partnership in which the taxpayer held a general
partnership interest were taken into account in concluding that
the taxpayer did not constitute a mere holding company. We
believe that this aspect of the holding in Turner supports our
holding herein that activities of an affiliated partnership may
support the accumulation of earnings by a corporation that owns a
controlling interest in the partnership. We note that, through
Holdings LLC and Operating LLC, petitioner owned 99 percent of
the limited and 99 percent of the general partnership interests
in ADCS-Limited.
Under the particular facts and circumstances of this case,
in evaluating the earnings retained by petitioner as of the end
of its short 3-month taxable year ending December 31, 1996, and
as of the end of its short 9-month taxable year ending October
10, 1997, we believe it appropriate to take into account the
business activities of ADCS-Limited and of ADCS-Korea. The facts
before us establish that petitioner and its affiliated
corporations, limited liability companies, and partnership
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