United Dominion Industries, Inc. v. United States

Under § 172(b)(l)(I) of the Internal Revenue Code of 1954, a taxpayer may carry bach its “product liability loss” up to 10 years in order to offset prior years’ income. The issue here is the method for calculating the product liability loss of an affiliated group of corporations electing to file a consolidated federal income tax return. We hold that the group’s product liability loss must be figured on a consolidated basis in the first instance, and not by aggregating product liability losses separately determined company by company.

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A “net operating loss” results from deductions in excess of…