The U.S. Tax Court recently ruled on the validity of a 2003 Treasury final rule (sec. 1.482-7(d)(2)) that requires participants in qualified cost-sharing arrangements to share stock-based compensation costs in order to achieve an arm's-length result. The case involved a Delaware parent corporation and its subsidiary in the Cayman Islands. The two companies entered into an R&D cost-sharing agreement, which did not include the cost of the stock-based compensation for the parent company's em…