The US Tax Court has held that advance agreements executed between related parties were appropriately characterized as equity for US Federal income tax purposes. PepsiCo Puerto Rico, Inc. v. Commissioner of Internal Revenue; PepsiCo, Inc. and Affiliates v. Commissioner of Internal Revenue, T.C. Memo. 2012-269 (Docket Nos. 13676-09, 13677-09, 20 September 2012). The case involved a US parent corporation (PepsiCo) and its group of affiliated corporations that included Netherlands Antilles companies. The Netherland Antilles companies held promissory notes issued by the group's US affiliated corporations (Frito-Lay, Metro Bottling, and PepsiCo) and held interests in foreign entities that were treated as partnerships...