Computervision International Corp. - Page 3

                                        - 3 -                                         
                                  FINDINGS OF FACT                                    
               Unless otherwise indicated, all Rule references are to the             
          Tax Court Rules of Practice and Procedure, and all section                  
          references are to the Internal Revenue Code in effect for the               
          years in issue.  Some of the facts have been stipulated for trial           
          pursuant to Rule 91.  The parties' stipulations are incorporated            
          in this Memorandum Opinion by reference and are found accordingly           
          except as noted below with respect to certain stipulations to               
          which objections were reserved.                                             
          General Background                                                          
               The principal place of business of both CV and CVI was                 
          Bedford, Massachusetts, at the time each filed its petition in              
          the instant case.  CV, a Delaware corporation, designs,                     
          manufactures, and sells computer-aided design, computer-aided               
          manufacturing, and computer-aided engineering (CAD/CAM/CAE)                 
          products.   CV maintains its books and records on an accrual                
          accounting basis using a calendar year.2  During relevant                   
          periods, CVI, a Massachusetts corporation, maintained its books             
          and records on an accrual accounting basis using a fiscal year              
          ending January 31.3  During CV's and CVI's taxable years ending             

          2                                                                           
               In 1988, however, CV, together with at least certain of its            
          subsidiaries, filed a consolidated Federal income tax return for            
          the period beginning Jan. 1, 1988, and ending Feb. 5, 1988.                 
          3                                                                           
               In 1985, however, CVI, filed a Form 1120-DISC for the period           
                                                             (continued...)           




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