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The Limited

The Limited, Inc. v. Comm'r., 113 T.C. No. 13 (September 7, 1999)

This case involved Subpart F of the Code---the controlled foreign corporation provisions. Some of the income of controlled foreign corporations (CFCs) enjoys deferral of US tax liability until it is repatriated, either in the form of a dividend or by having the foeign corporation invest its earnings in the US.

In this case, the CFC purchased nearly $175 million of CDs from a corporation related to the the CFC's parent. That corporation operated as a credit card band for the taxpayer's private issue credit cards.

The taxpayer took the position that the CDs were deposits with a "person carrying on the banking business" and should therefore not be treated as having been repatriated under section 956.

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Steven Huddart
Smeal College of Business, Penn State University, University Park, PA 16802-3603 USA
(814) 865-3271
(814) 863-8393 fax
huddart@psu.edu
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