Hughes Tool Co. v. Commissioner

HOLMES, Circuit Judge.

This case involves the correctness of a deduction, made in a consolidated return of income for 1930 by petitioner, Hughes Tool Company, and its affiliates, of a net loss sustained by an affiliate, the Caddo Company, during a period in 1929 immediately preceding its affiliation and for which it had filed a separate return. That a net loss was suffered is admitted, but whether or not a deduction therefor in a consolidated return for a subsequent year is limited to •an amount not exceeding the cost or aggregate basis of the capital stock of the affiliate held ,by those…