2013-10-23
Last week the IRS published PLR 201340010
which concluded that production activities included growing activities for purposes of
determining whether a CFC "produced" products for purposes of Treas.
Reg. §1.954-3(a)(4)(i) - (iv) and Code §954(d), dealing with foreign
base company sales income ("FBCSI"). The income was not FBCSI because
the CFC (and its disregarded entities) satisfied the "manufacturing
exception."
A chart of the structure is shown below (click on the image to enlarge), and the chart can be viewed as a PDF file here: PLR 201340010:
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