Last week the I.R.S. 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
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: