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MEMORANDUM FINDINGS OF FACT AND OPINION
WELLS, Judge: Respondent determined a deficiency of
$9,460,419 in the Federal income tax of petitioner Computervision
International Corp. (CVI) for its taxable year ended January 31,
1984.
Respondent determined the following deficiencies in the
Federal income tax of petitioners Computervision Corp. (CV) and
subsidiaries for the following years:
Taxable Year Ended Deficiency
Dec. 31, 1983 $25,226
Dec. 31, 1984 32,279
Dec. 31, 1987 4,720,840
Feb. 5, 1988 570,819
After concessions, the following issues remain for decision:
(1) Whether CVI qualifies as a domestic international sales
corporation (DISC) for its taxable years ended January 31, 1983
and 1984;
(2) whether petitioners are entitled to net interest income
against interest expense in calculating CV's deduction for
commissions payable to CVI with respect to each of CVI's taxable
years ending January 31, 1983 and 1984, and December 31, 1984;
and,
(3) whether the net proceeds of the sale of a certain stock
warrant held by CV are long-term capital gain, ordinary income,
or a reduction in CV’s cost of goods sold.
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