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order to show the multiplicity of steps taken and documents
executed between June 30 and July 11, 1997, in order to complete
the sale in accordance with the terms of the June 30, 1997,
agreement. As stated supra section IV.A.2., our decision in this
case does not depend upon the actual date of the H&C stock sale.
As a result, respondent’s evidentiary objection, like
petitioner’s motion to strike respondent’s duty-of-consistency
argument, is essentially moot. Therefore, we shall overrule
respondent’s objection.
V. Status of the H&C Assets as Assets Used in Dover UK’s
Business: Application of Section 1.954-2(e)(3), Income Tax
Regs.
A. Introduction
Petitioner argues that Dover UK’s deemed sale of the H&C
assets qualifies as a sale of property used in Dover UK’s trade
or business. Therefore, pursuant to section 1.954-2(e)(3)(ii)
through (iv), Income Tax Regs., that property is not, within the
meaning of section 954(c)(1)(B)(iii), property “which does not
give rise to any income”, and Dover UK’s sale does not give rise
to FPHCI taxable to petitioner. In support of its argument,
petitioner relies upon the check-the-box regulations and revenue
rulings previously issued by respondent. Respondent disagrees on
the basis of caselaw, which he cites in support of his argument
that Dover UK’s deemed sale of the H&C operating assets did not
constitute a sale of assets “used or held for use” in Dover UK’s
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