Page 435 - Large Business IRS Training Guides

FDII - Example 6 - Manufacturer Hypothetical

sold to a manufacturer is for a foreign use, and whether the
Determining if property
qualifies for the 250 deduction with respect to FDII, can depend on
sale potentially
of factors.
a variety

• Assume a U.S. corporation sells
property to a foreign person that is a
manufacturer. Consider
how the answer on foreign use will change if the
performs minor assembly, packaging, or labeling activities abroad
manufacturer
and then sells the property to customers in the U.S.
with the property

• Key
Point: Manufacturing is considered to be the creation of or material physical
but does not include minor assembly, packaging, or
change to tangible property,
labeling.

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