Accounts receivable from export transactions are qualified export assets for purposes of the DISC's 95 percent assets test.1 Interest on these receivables is included within qualified export receipts for purposes of the DISC's 95 percent receipts test.2
Introduction
There are two types of accounts receivable:3 trade receivables
for amounts due from customers ( whether or not these customers
are affiliates of the DlSC),4 and receivables for commissions
from the DISC's suppliers.5 While both types of receivables can
constitute qualified export assets, there are significant differences
between them.
Buy-Sell versus Commission
Status
A DISC can operate on
a buy-sell basis, a commission basis, or a combined basis. When
a DISC operates on a buy-sell basis, it is the seller of the goods
and holds the trade receivables from its customers. When a DISC
operates on a commission basis, its supplier is
1. §992(a)(1)(B).
2. §992(a)(1)(A).
3. See Feinschreiber, How a DISC Can Use Trade Receiv4bles
to Best Advantage, 3 INT'L TAXJ. 452 ( 1977) ;see also
Rev. Rul. 76-284, 1976-2 C.B. 236.
4. §993(b)(3); Prop. Reg. §1.993-2(d)(1).
5. § 993(b) (3); Prop. Reg. § 1.993-2(d) (2).
