Procter & Gamble Co. v. Commissioner
United States Tax Court
AG, a Swiss corporation and a wholly owned subsidiary of petitioner, owned 100 percent of E, a corporation organized in Spain. Spanish law effectively precluded E from making royalty payments to AG for the use of petitioner's intangible property. Respondent determined that an allocation of income from E to AG pursuant to section 482 was necessary to clearly reflect income.
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AG, a Swiss corporation and a wholly owned subsidiary of petitioner, owned 100 percent of E, a corporation organized in Spain. Spanish law effectively precluded E from making royalty payments to AG for the use of petitioner's intangible property. Respondent determined that an allocation of income from E to AG pursuant to section 482 was necessary to clearly reflect income. The allocation in turn increased petitioner's subpart F income under section 951. Held, because Spanish law effectively precluded E from paying AG, effectively blocking AG's receipt of the income, there was no impermissible…
1Opinion of the Court
The Procter & Gamble Company, Petitioner v. Commissioner of Internal Revenue, Respondent
Procter & Gamble Co. v. Commissioner
Docket No. 16521-84
United States Tax Court
95 T.C. 323; 1990 U.S. Tax Ct. LEXIS 89; 95 T.C. No. 23;
September 18, 1990, Filed
Decision will be entered under Rule 155.
AG, a Swiss corporation and a wholly owned subsidiary of petitioner, owned 100 percent of E, a corporation organized in Spain. Spanish law effectively precluded E from making royalty payments to AG for the use of petitioner's intangible property. Respondent determined that an allocation of income from E to AG…
2Cases cited22 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- Metcalf & Eddy v. MitchellSupreme Court of the United States · 1926
- United States v. BasyeSupreme Court of the United States · 1973
- Commissioner v. First Security Bank of Utah, N. A.Supreme Court of the United States · 1972
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