Wolter Construction Company, Inc. v. Commissioner of Internal Revenue

CELEBREZZE, Circuit Judge.

The question in this case is whether deductions claimed on a consolidated income tax return filed by a parent corporation and its controlled subsidiary corporation, with respect to net operating losses sustained by the subsidiary in years prior to its affiliation with the parent, are allowable as net operating loss carryovers when the subsidiary had no post-consolidation income for the tax years in question.

I

Wolter Construction Company, Inc. (taxpayer) appeals from a decision of the United States Tax Court that determined deficiencies in its income tax for the years…