- 3 -
Group) for its taxable year ended August 31, 1992. Following
concessions, we must decide whether MedChem P.R. meets the
“active conduct of a trade or business within a possession”
requirement of section 936(a)(2)(B). We hold it does not.1
Unless otherwise indicated, section references are to the
Internal Revenue Code applicable to the relevant years. Rule
references are to the Tax Court Rules of Practice and Procedure.
We attach hereto as appendix A a summary of some of the critical
events that occurred during: (1) The 20�-month period from
December 18, 1987, to August 31, 1989, that preceded the 3-year
test period relating to our determination under section
936(a)(2)(B), (2) the 3-year test period from September 1, 1989,
to August 31, 1992, and (3) the 20-month period from August 31,
1992, to April 1994 that followed the 3-year test period.2
Background
The parties have filed with the Court a stipulation of facts
and certain related exhibits. We incorporate herein by reference
1 Given that holding, we need not and do not decide the
parties’ other dispute; to wit, whether MedChem P.R. manufactures
or produces a product in the possession as required by sec.
954(d)(1)(A).
2 We take into account petitioners’ actions in years
subsequent to their 1992 taxable year to evaluate their prospects
during their 1992 year. See Levin v. Commissioner, 832 F.2d 403,
406 n.3 (7th Cir. 1987) (Tax Court allowed to rely on subsequent
events to determine whether those events were consistent with the
Court’s judgment of the facts available in the year in issue),
affg. 87 T.C. 698 (1986).
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