Page 398 - Large Business IRS Training Guides

Foreign Use of
Property

• Foreign use for general
property (Prop. Reg §1.250(b)-4(d)(2)):

is not subject to domestic use within 3 years of the date of
 The property
delivery; or

is subject to manufacture, assembly, or other processing
 The property
before the property is subject to a domestic use.
outside the U.S.

 Special rules for
transportation property

• Foreign use for intangible property
(Prop. Reg §1.250(b)-4(e)(2)):

 A sale of intangible property is for a foreign use only to the extent of the
revenue generated from exploitation outside the U.S.

 If a sale of rights providing for both within and outside the U.S., foreign use
over the total revenue
is in proportion to revenue from outside the U.S.

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