Manchester Sav. Bank & Trust Co. v. Commissioner
United States Board of Tax Appeals
CONSOLIDATED RETURNS - COMPUTATION OF PROFIT DERIVED UPON LIQUIDATION OF SUBSIDIARY. - Petitioner and its wholly owned subsidiary filed consolidated returns for the years 1917 to 1931, inclusive, and for the year 1932 petitioner filed a separate return. The subsidiary sustained operating losses in the prior years, which were used in consolidated returns to reduce petitioner's taxable income.
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CONSOLIDATED RETURNS - COMPUTATION OF PROFIT DERIVED UPON LIQUIDATION OF SUBSIDIARY. - Petitioner and its wholly owned subsidiary filed consolidated returns for the years 1917 to 1931, inclusive, and for the year 1932 petitioner filed a separate return. The subsidiary sustained operating losses in the prior years, which were used in consolidated returns to reduce petitioner's taxable income. The subsidiary was liquidated in 1932. Held, in computing the taxable profit derived by petitioner from such liquidation, the cost basis of the subsidiary's stock should be reduced by the aggregate amount…
1Opinion of the Court
OPINION.
Hill :
This is a proceeding for the redetermination of a deficiency in income tax for the year 1932 in the amount of $1,552.44. The issues raised by the pleadings are (1) whether respondent erred in failing to treat the return filed for the year 1932 as a consolidated return of petitioner and its affiliate, the Manchester Realty Co., or, on the other hand, to permit the filing of a consolidated return for said companies; and (2) whether respondent erred in determining that petitioner realized a profit in the taxable year upon the liquidation of its affiliate, computed on the basis of…
2Cases cited1 opinion
- Burnet v. Aluminum Goods Manufacturing Co.Supreme Court of the United States · 1933
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- Landy Towel & Linen Service, Inc. v. CommissionerUnited States Tax Court · 1962
- Manchester Sav. Bank & Trust Co. v. CommissionerUnited States Board of Tax Appeals · 1936