1108002 Informal Interpretation

From: (Redacted)
Sent: Thursday, August 18, 2011 2:05PM
To: Berg,Karen E.
Subject: Questions on Item 5 Reporting

Karen,

Ihave a few questions about Item 5 reporting for a filing we are working on.Could you please advise how the following should be handled?

Salesof manufactured products by a U.S. entity to foreign entities within the sameperson who then resold those products to customers outside the U.S. Use thetransfer price?

Usetransfer if it's available, otherwise, sale price. (KB)

Salesof manufactured products by a foreign controlled entity to a "broker"located in the U.S., where the products were shipped directly from foreigncontrolled entity to the broker's customer in a different foreign country. Theproducts never entered the U.S., but it was the U.S. broker that paid ourforeign controlled entity for the goods. Title and risk of loss transferredoutside the U.S. No reporting of this revenue?

Right,no reporting of this because the product never made it here. (KB)

Salesof manufactured goods by a foreign controlled entity direct to a third-partycustomer in the U.S. The tip sheet says this should be reported at thewholesale/retail price. What if the manufacturer doesn't know the price thecustomer is selling it at? Or, as is likely in this instance, the customer usesthe product as a component of a product it is manufacturing, and does not sellthis component separately at all?

Whatwe mean by this is the purchase price the (your) customer paid, not what yourcustomer then resold the product for. (KB)

Thankyou,