Container Corp. v. Comm'r
United States Tax Court
Vitro, a Mexican corporation, charged P -- one of its U.S. subsidiaries -- a fee to guarantee P's debts. R determined a deficiency for failure to withhold 30 percent of such fees as "fixed or determinable annual or periodical" income received from a U.S. source under section 881(a), I.R.C. Held: The guaranty fees are analogous to payments for a service and therefore are not U.S. source income.
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Vitro, a Mexican corporation, charged P -- one of its U.S. subsidiaries -- a fee to guarantee P's debts. R determined a deficiency for failure to withhold 30 percent of such fees as "fixed or determinable annual or periodical" income received from a U.S. source under section 881(a), I.R.C. Held: The guaranty fees are analogous to payments for a service and therefore are not U.S. source income. Under sec. 1.861-4, Income Tax Regs., the source of the service is where the service is performed. Because the guaranty was provided from Mexico, fees for the guaranty are Mexican source income. Thus, P…
1Opinion of the Court
CONTAINER CORPORATION, SUCCESSOR TO INTEREST OF CONTAINER HOLDINGS CORPORATION, SUCCESSOR TO INTEREST OF VITRO INTERNATIONAL CORPORATION, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Container Corp. v. Comm'r
No. 3607-05
United States Tax Court
134 T.C. 122; 2010 U.S. Tax Ct. LEXIS 5; 134 T.C. No. 5;
February 17, 2010, Filed
Vitro, a Mexican corporation, charged P -- one of its U.S. subsidiaries -- a fee to guarantee P's debts. R determined a deficiency for failure to withhold 30 percent of such fees as "fixed or determinable annual or periodical" income received from a U.S. source…
2Cases cited17 opinions
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Putnam v. CommissionerSupreme Court of the United States · 1956
- Commissioner v. WodehouseSupreme Court of the United States · 1949
- Centel Communications Co. v. CommissionerUnited States Tax Court · 1989
- Dillin v. CommissionerUnited States Tax Court · 1971
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