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Methods to Determine Taxable Income in Connection with a Cost Sharing Arrangement

This regulation requires controlled participants in a Qualified Cost Sharing Arrangement (CSA) to share intangible development costs (IDCs) in proportion…

What Methods to Determine Taxable Income in Connection with a Cost Sharing Arrangement requires

This regulation requires controlled participants in a Qualified Cost Sharing Arrangement (CSA) to share intangible development costs (IDCs) in proportion to their reasonably anticipated benefits (RAB) and to make arm's length buy-in payments for pre-existing intangibles, known as Platform Contribution Transactions (PCTs), to ensure outcomes are consistent with the arm's length principle under §1.482-7(a)(1).

Pillar: Tax & Transfer Pricing · Authority: U.S. Department of the Treasury / Internal Revenue Service (IRS) · Version: 1.0.0 · Last updated:

Primary source: https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/section-1.482-7

SHA-256 integrity: c4278166e6655bae439b48842b802a2586768db16535e71caf560b1748ea70ba

Primary Citations — 7 traced to source

  • 26 CFR §1.482-7(a) - In general.
  • 26 CFR §1.482-7(b) - Qualified cost sharing arrangement.

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