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the general fact pattern of the instant cases has some
similarities to that in MedChem, the aggregate of the differences
between the facts of MedChem and the facts of the instant cases
convinces us that the instant cases fall on the other side of the
line; i.e., that EAPR actively conducted a trade or business in
Puerto Rico during the relevant time period. With the caution
that our conclusion is based on the aggregate of the differences
between the instant cases and MedChem; i.e., that no one
difference is critical by itself, we proceed to describe the
significant differences.
In MedChem, the taxpayers had acquired from an unrelated
entity the assets of a Puerto Rican business that manufactured
and sold a specific pharmaceutical (hereinafter sometimes
referred to as the drug). MedChem (P.R.), Inc. v. Commissioner,
116 T.C. at 314. The assets were divided between taxpayer-parent
and taxpayer-subsidiary; the subsidiary is the corporation that
was claimed to qualify for the possession tax credit under
section 936(a). Id. at 314, 327. The taxpayer-parent got
receivables, several noncompetition agreements, goodwill,
contract rights, records, patents and related know-how,
trademarks, and Food and Drug Administration approvals. Id. at
10(...continued)
other listed activities occurred continually throughout that
period.” In the instant cases, it appears that all of the
activities that we discuss occurred during the relevant test
period.
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