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In view of the foregoing, we conclude that EAPR actively
conducted a trade or business in a U.S. possession within the
meaning of section 936(a)(2)(B).
4. Respondent’s Other Contentions
a. Genuine Issues of Material Fact
i. Place of Manufacture
Respondent contends as follows on opening brief:
2. There is a factual dispute as to where the video
games were manufactured. * * * Whether video
games were manufactured in the Dominican Republic
or Puerto Rico is a crucial factor in ascertaining
whether EAPR was engaged in the active conduct of
a trade or business in Puerto Rico.
On answering brief, respondent objects to petitioners’ proposed
finding of fact that “The video games at issue that EA purchased
from EAPR were manufactured in Puerto Rico. [Stip. � 27]”, as
follows:
22. Objection. The evidence establishes that the
video games that EA purchased from EAPR were manufactured by
PPI employees in PPI’s Dominican Republic facilities as well
as in PPI’s Puerto Rico facilities. See RRPSOF � 17.
However, the parties stipulated as follows: “27. The video
games at issue that EA purchased were manufactured in Puerto
Rico.” Note that respondent does not contend that EA bought the
video games from PPI; respondent accepts petitioners’ contention
that EA bought the video games from EAPR. Respondent’s only
objection is as to the geographic location of the manufacturing--
the very point that the parties resolved by their stipulation.
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