Page 402 - Large Business IRS Training Guides

Special
Rules on Foreign Use for

Related Party
Transactions

• Property
sold to a foreign related party is for a foreign use, if taxpayer
the property is ultimately sold or used by related party:
establishes

• in connection with a sale or service to an unrelated foreign person for
a
foreign use

Prop. Reg §1.250(b)-6(c)

• Services
provided to a foreign related person is for a foreign use, if
taxpayer
establishes the services:

• are NOT
substantially similar to the services provided by such related party
persons
to U.S.
Prop.
Reg §1.250(b)-6(d)

affiliated group member within the meaning of section
• Related party =
substituting 50% for 80% and without regard to paragraphs (2)
1504(a),
and (3)
of section 1504(b)

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